Rio Tinto Fears Mining Tax Could Spread

25 May 2010 (Last Updated May 25th, 2010 18:30)

Rio Tinto said it fears other countries may follow Australia's lead of implementing a mining super profits tax. The proposed tax, due to come into force in 2012, has generated widespread criticism among mining giants including BHP Billiton, Rio Tinto and Xstrata, which have put expansions

Rio Tinto said it fears other countries may follow Australia's lead of implementing a mining super profits tax.

The proposed tax, due to come into force in 2012, has generated widespread criticism among mining giants including BHP Billiton, Rio Tinto and Xstrata, which have put expansions on hold and threatened to take projects offshore.

Rio fears that mineral-rich countries such as Brazil, Mongolia, Zambia, Peru and Ecuador could consider Australia's tax as a precedent, while Chile, the world's biggest copper exporter, has already announced a hike in royalties.

Rio Tinto managing director Tom Albanese told Reuters it will take longer to evaluate the viability of projects in Australia in the wake of the proposed resource tax.

He further said the company should reconsider what Rio calls a "seriously flawed" tax.

Meanwhile, Rio Tinto shareholders have approved a proposed merger with rival BHP Billiton in iron ore that would result in cost savings of $10bn.