Rio slams RSPT

RIO Tinto chief executive Tom Albanese is labelling the Rudd government’s resource super-profits tax as his number one sovereign risk issue on a global basis.
Rio slams RSPT Rio slams RSPT Rio slams RSPT Rio slams RSPT Rio slams RSPT

Rio Tinto chief executive Tom Albanese

Blair Price

Treasury estimates have priced in $3 billion of net revenue from the RSPT for 2012-13 and another $9 billion for 2013-14.

While the ultimate outcome of the tax proposal is dependent on a looming federal election, Albanese told reporters if Rio was looking at two years before the tax, then he would be asking his managers to evaluate it on a worst-case basis.

In the same briefing, Rio’s iron ore chief Sam Walsh said the company was facing an extended period of uncertainty which was delaying projects.

Rio had already signalled it would undertake further iron ore expansion in Canada.

By all accounts, the federal government did not adequately consult the mining industry before unveiling its “super profits” tax.

PricewaterhouseCoopers global mining head Tim Goldsmith said many governments around the world were looking at the mining industry as a source of taxation revenue to deal with demanding budget deficits.

“The Australian government’s recently announced resource super-profits tax is one example, while other jurisdictions have flagged royalty increases,” he said.

“It is important how this process is managed. Taxation can be a tremendous lever in determining a country’s attractiveness as an investment destination.

“Clearly, sovereign risk will be a much greater consideration across more jurisdictions in future.”

Treasurer Wayne Swan’s weekend claim that mining companies pay effective tax rates of 13% and 17% was disproven by Australian Taxation Office figures unearthed by the opposition.

The ATO sums revealed that mining companies paid 27.8% effective tax and up to 41.3% when state royalties were included, according to the Australian.

Various reports suggest Swan might have got his figures from a research paper partly written by a North Carolina University graduate student who mistakenly included New Zealand data.