Heat Treat Industry News

May 29, 2010

Rio chairman says Australia's economic reputation could be destroyed

Rio Tinto chairman Jan du Plessis has warned that Australia’s “excellent reputation” in the global economy is under threat due to the government’s proposed resources super profits tax (RSPT).

Speaking at the company’s annual general meeting in Melbourne, Mr du Plessis said: “Applying this tax retrospectively is a dangerous prospect and has the potential to destroy Australia’s hitherto excellent reputation in the global economy.”

“I don’t say these words lightly, and I am very keen to work with the government to get the right policy outcome for the industry and the nation.”

Mr du Plessis’s said that retrospective taxation raises sovereign risk and would increase the cost of investing in the country for the next generation.

The chairman’s comments were reinforced at the AGM by Rio Tinto chief executive Tom Albanese, who said the company was “looking for fairness on consultation”.

“This means a thorough and proper dialogue on the key issues of retrospectivity, immediate capital write-down, the 40% tax rate and the 6% rate of return,” he said.

Mr Albanese explained that the company supported “genuine tax reform,” but was concerned the proposed tax would “erode Australia’s competitiveness, severely curtail investment and limit jobs growth”.

Meanwhile, Mr du Plessis said during his speech that the company expected demand from China for iron ore, copper, coal and aluminium to grow over the next 15 years.

He added: “after which time we expect to see increasing commodity demand from India. The long-term outlook therefore continues to make our business an attractive proposition”.

http://www.mining-journal.com/

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