The Australian newspaper reported today that BHP Billiton Ltd., Rio Tinto Group and Xstrata Plc have called a meeting as they believe discarding a mining tax contract brokered with Prime Minister Julia Gillard.

The newspaper reported that Gillard's decision not to pay compensation mining companies intended for higher state royalties may scupper the deal confirmed in July.

Mining companies say that the agreement applies to all state royalties, not just those in place when Gillard's predecessor, Kevin Rudd who first proposed a wealth "super profits" tax in May.

Mining companies face a bigger tax trouble after the resources tax boots in if state governments elevate royalty rates, meaning companies would pay further in the absence of compensation from the government for the advanced state rate.

Rio Tinto is positive the mining tax deal will be honored by the government, Sam Walsh. It is the head of Rio's iron ore business. He said in an e-mail today that it's not perfect but they have a pact and they can live with it.

Yesterday Resources Minister Martin Ferguson said that higher state royalties won't be compensating by cuts to the considered 30 percent national tax.