Rio Tinto warns again over Aussie 'super tax'

16th Jun 2010 08:41

Rio Tinto has had another moan about the proposed Australian 'super tax' on the mining industry and tried to clear up speculation about the amount of tax it has actually paid Down Under."Your board has serious concerns about the impact of this proposed new tax, not only for Rio Tinto and the mining industry, but indeed for the whole of Australia's future economic prosperity," wrote chairman Jan du Plessis in a letter to shareholders just a few week after the miner's AGM in Melbourne.He confirmed that the company has paid tax at an effective rate of 35% on its Australian profits over the past decade, handing over A$20bn in corporate tax and royalties between 2000 and 2009.Rio, which employs over 19,000 people in the country and has almost half its assets invested in Australia, is especially worried about the application of the tax to existing projects.Under the proposed super tax, the industry will be taxed at nearly 57%, leaving Oz with the highest taxed mining industry in the world. Rio made A$37bn net profit in Australia between 2000 and 2009, and ploughed A$38bn back in through capital expenditure and acquisitions."We are currently reviewing all our projects in Australia under the worst-case tax scenario to assess the impact the proposed super tax will have on our future growth plans," says du Plessis. "However, what is abundantly clear to us, is that had this tax been in place ten years ago, we would not have invested as much as we have in the Pilbara, and Rio Tinto would have been a much smaller producer of iron ore today."Yesterday, the company announced plans to spend $469m (£317m) building the Kennecott Eagle nickel and copper mine in the US."Rio Tinto has sought a genuine consultation process with the Government on the proposed super tax and has assured it that we remain willing and able to engage in constructive discussions," he adds. "We continue to work with our industry colleagues and the Minerals Council of Australia to ensure that our position on the super tax proposals is effectively communicated, not only to the Government, but also to the Australian community."