International mining firm Rio Tinto is cautiously encouraged by the invitation sent by new Australian Prime Minister Julia Gillard for the industry to begin full and open engagement on all aspects of tax reform.

In a statement released Friday, the company said: "It is a positive first step. The (Australian) government needs to end the uncertainty affecting the Australian economy as soon as possible."

Rio Tinto also announced that it has committed to suspend its national advertising campaign on the mining tax in line with Friday's request by Prime Minister Gillard.

However, the company emphasised that "this commitment is dependent on the Government's willingness to properly engage on the fundamental principles outlined:

  • Ensures any tax reform proposal is not applied retrospectively
  • Delivers an effective tax rate that retains Australia's international competitiveness as an investment destination.

It added: "No doubt the Resources Super Profits Tax was flawed policy and that it has already caused damage to Australia's reputation and the national economy."

Australia's second largest mining company, Rio Tinto is engaged in mining, mineral production and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.