Australia's plan to impose a new tax on major coal and iron ore miners moved a step closer Monday after key independent MPs said they would back the legislation in return for stronger oversight of coal seam gas projects and a higher threshold where the tax kicks in.

Independent member of parliament, Andrew Wilkie, said he would support the 30 percent tax, in return for lifting the starting threshold from a profit of A$50 million to A$75 million, to help protect small miners.

Fellow independents Tony Windsor and Rob Oakeshott earlier announced a deal with Prime Minister Julia Gillard, ensuring the government will have the numbers to pass the mining tax laws later this week.

I think we can both say, at the start of this conversation, that we both are going to support it, Windsor told reporters at a joint media conference with Oakeshott.

Gillard's minority government, which holds a one-seat majority with support from one Green and the three independent lawmakers, wants the mining tax passed by the lower House of Representatives by the end of the week.

The government wants to slap the proposed tax on big iron ore and coal miners as part of reforms designed to balance its budget and reallocate wealth from the mining industry, now enjoying the biggest boom in a century, to other sectors.

The tax, to apply from July 2012, is being closely watched by other resource nations and the government says it will ensure Australians get a fairer return from the mining boom, being fed by strong Asian demand.

The tax is forecast to raise A$7.7 billion ($7.9 billion) in its first two years from July 1 next year, helping to return the budget to surplus by fiscal 2012-13.

It would also help fund a 1 percentage point cut in the company tax rate to 29 percent, which is portrayed as a boost for non-mining sectors, especially those hit hard by a strong local currency.

The government and global miners BHP Billiton, Rio Tinto and Xstrata agreed on the mining tax in 2010, but smaller miners such as Australia's Fortescue Metals Group have complained that the tax favors big miners.

Under the deal with the independents, Gillard Monday said the government will provide A$150 million for an independent scientific body to examine the impact of coal seam gas projects on farming and water supplies.

The government will also work with state governments, who have responsibility for coal seam gas exploration, to make sure they take advice from the scientists in coal seam gas approvals.

These arrangements will provide all Australians with greater confidence that projects will be subject to rigorous and objective scientific assessment, Gillard said in a statement.

Wilkie said his deal with the government meant the starting threshold would rise from A$50 million to A$75 million, with the tax to be phased in up to A$125 million. He said the changes would cost A$100 over the first three years of the tax.

The Greens, who want the tax rate to be lifted to 40 percent and for the tax to also apply to uranium and gold mines, said they now wanted to be sure the government did not cut other areas of the budget to fund Wilkie's amendments.

We are going to ensure that the public interest be upheld here. We will be talking to the government in the coming day or two, Greens leader Bob Brown told reporters.,

(Reporting by James Grubel; Additional reporting by Rob Taylor; Editing by Ed Davies)

Australia Julia Gillard Energy