Rio Tinto Says Australian Mining Tax Divorced From Commercial Reality

16th Jun 2010 03:57

MELBOURNE (Dow Jones)--Rio Tinto Ltd. (RTP) renewed its attack Wednesday on the Australian government's planned mining tax, which it says is divorced from commercial reality, penalised efficient operations and would slow investment and cost jobs. In a letter to shareholders, Chairman Jan du Plessis said the company supported tax reform that would enhance the competitiveness of the Australian economy, but that the proposed resource super profits tax wouldn't achieve that. "The government's proposal will penalise efficiency, discourage competitiveness, curtail investment and limit jobs growth," he said. "It has been developed in a vacuum and is divorced from the day-to-day realities of business." Du Plessis said the company was particularly concerned at the application of the new tax to existing projects, which he said would undermine the stable tax and regulatory environment needed for commitment to mining projects that could take decades to pay back the investment. "The government's current proposals, arrived at without consultation, have now significantly destabilised that investment framework...As a result, there has been a considerable increase in the perceived risk of investing in Australia, threatening to make Australia a much less attractive place in which to invest." -By Alex Wilson, Dow Jones Newswires: 613-9292-2094; [email protected] (END) Dow Jones Newswires June 15, 2010 22:57 ET (02:57 GMT)