Fortescue Metals Group Ltd. denounced Australia's proposed minerals resource rent tax, calling it "economic vandalism."

The draft MRRT legislation, released Friday, calls for a 30 percent tax applied to profits made by iron ore and coal companies. It is to take effect July 1, 2012.

The original version introduced in 2010 by former Prime Minister Kevin Rudd proposed a 40 percent tax on mining profits. That enraged the mining lobby, which spent millions of dollars campaigning against the tax, leading in part to Rudd's downfall.

His predecessor, Julia Gillard, negotiated key terms of the MRRT with the world's biggest miners BHP Billiton, Rio Tinto and Xstrata. It was then fleshed out by a government advisory group, led by former BHP Chairman Don Argus, which made 94 recommendations.

Fortescue Chief Executive Officer Andrew Forrest says the proposed tax benefits multinational mining companies at the expense of smaller domestic miners.

On Monday, Forrest threatened to test the constitutionality of the MRRT as part of a High Court -- Australia's highest court -- challenge, The Australian newspaper reports.

"What we have in the MRRT is a secret deal between the government and three big multinational mining companies. It was designed to deliver benefits solely for those three companies," Forrest said in a statement.

Fortescue is Australia's third largest iron ore miner.

"The MRRT delivers enormous benefits to the multinational companies, which can fund projects from their own balance sheets," Forrest said. "The impact of the MRRT is that it creates a cost impost on companies requiring debt funding, like Fortescue and every other Australian mining company seeking to develop new projects."

Forrest says the tax will dry up the pipeline of exploration projects, which would dampen Australia's economic growth.

"To penalize only the iron ore and coal mining industries at a time when they are the mainstay of the national economy is lunacy," Forrest said.

But Australian Treasurer Wayne Swan, in releasing the draft legislation Friday, said the initiative was crucial to maximize the opportunities of the country's and would ensure that Australians receive a fair return from the nation's resources.

The government hopes to raise $8.2 billion in revenue from the first two years of the tax.

"These reforms will ensure Australians receive a better return from their non-renewable resources and will help strengthen our economy through increased superannuation, new and better infrastructure, and business tax cuts," Swan said.