Rio Tinto set to expand after tax revamp
Rio Tinto is looking to ramp up projects again after the Gillard government's switch from the resource super-profits tax (RSPT) to the minerals resource rent tax (MRRT).
The company's chief executive Tom Albanese told a mining function in London overnight, ''This week, I have now asked my team to review projects against this more positive backdrop."
''As I've said, I do want to invest in Australia and recent events remove the great uncertainty which had been holding us back. And I am keen to get projects moving again.''
Rio Tinto suspended plans to expand its Pilbara iron ore production capacity from 230 to 330 million tonnes a year when the RSPT was declared.
The mining giant also said it would resume a feasibility study into a proposed $12 billion expansion of its Pilbara iron ore operations.
According to Mr Albanese, Rio Tinto was looking to ramp up operations in the wake of the global credit turmoil.
''At the beginning of the year, I said we had seen a recovery from the depth of the global financial crisis but that we could expect more volatility in the global economy, and that's exactly what we are experiencing today,'' Mr Albanese said.
''While we remain cautious on the outlook, 2010 is shaping up well from Rio Tinto's perspective.
''In the first quarter of this year, most of our operations continued to run flat out and we will update the market next week on our second quarter performance.''
Mr Albanese said the changing of the RSPT with the MRRT was a step in the right direction, but there was still room for consultation.
''We have been encouraged by the government's constructive engagement over the last couple of weeks,'' he said.
''Compared to the super tax, the MRRT goes a long way towards addressing concerns about international competitiveness, but it is important to note that the Government's new proposal, as it stands, still would leave Australia at the high end of the global taxation scale for the commodities of coal and iron ore.
''We now have further opportunity to work constructively with the Government to ensure that the tax system continues to encourage investment in Australia, but there is still much work to be done to finalise the details.''
Mr Albanese warned other nations considering a similar resource levy.
''I would advise policy makers to think carefully about country specific factors at play, the impact of decisions on international competitiveness, and appropriate compensation for the risks assumed,'' he said. ''While it may be appropriate in Australia, it may not necessarily suit a developing country.
''Policy makers around the world can learn a lesson when considering a new tax to plug a revenue gap, or play to local politics.''