MELBOURNE – Global miner Rio Tinto Ltd (RIO.AX) (RIO.L) said on Wednesday it was concerned that other countries could lead to Australia by the introduction of a windfall tax on mining profits to follow. Australia new super profits, due to come into force in mid 2012, has angered the mining industry, which has warned that leads me expansions in danger and could push foreign investment.
The uncertainty about the tax proposal, has wiped billions of dollars from the Australian mining companies’ market value and added to pressure on the Australian dollar AUD =, which is used to the Asian growth story and has 11 percent loss against the dollar since The tax was announced in early May
“We are concerned that others may see this as something they want to try too,” Rio CEO Tom Albanese told shareholders, later adding the government should reconsider what he called a “serious shortage” tax mentioned.
Analysts have said another resource-rich nation, Brazil, Australia, the tax should be regarded as a precedent and raising taxes on iron ore.
Mongolia, Zambia, Peru and Ecuador have also investigated and in some cases carried out a similar mining windfall profits tax.
Chile, the world’s largest copper exporter, had already announced temporary higher royalties to help cities destroyed by a major earthquake earlier this year to pay for reconstruction.
A senior Finance Ministry official Australia’s David Parker, the government initiate consultations with miners on the new tax, said resource-rich countries, increasingly the direction of the mining rent taxes and royalties from your systems.
He said a number of provinces in Canada and some U.S. states, the resource rent taxes had.
Australian iron ore miner Fortescue Metals Group (FMG.AX) has threatened to withdraw 15 billion U.S. dollars in projects over the tax, while Rio Tinto, any Australian investment plan revised.
Albanese, who has labeled the new tax, because the top of its business worldwide sovereign risk issue, said he was confused by reports of the government tax.
“I am confused by mixed messages from the government,” he told the annual meeting of Rio, in a reference to the suggestions of the booming mining sector should be delayed to other parts of the economy to help reduce the Aussie dollars.
INTERIM REPORT ON THIS WEEK tax
Rio is also strongly criticized the negotiations on the new tax, saying the talks are too narrow and not issues surrounding the competitiveness of industry in Australia.
Treasurer Wayne Swan, said that more than 80 mijn bouwbedrijven were now involved in consultations on new tax, although he declined to comment on areas of possible compromise, including the entry threshold for new taxes, fixed at about 6 percent and based on the 10-year government bond rate.
“The government continues to talk with many mining companies on their views. We’re really in our deliberations,” Swan told reporters.
“I’m not ruling anything in or out, because I will repeat what I said at that press conference on the first day, that [is] we are committed to getting a fair share of the Australian population,” he said.
“We have the design of the tax and we are on that opinion, and that’s what we keep doing it.”
The tax is the centerpiece of Prime Minister Kevin Rudd’s reelection campaign and efforts to rolling polls that the probability of a hung parliament to take out counter. [ID: nSGE64J02A]
Australia hopes the Government Treasury through an interim report later this week about the first talks with miners.
The government on Wednesday to support her tax plan by a group of leading economists, who said that the new super-profits tax would not with the current resources of Australia tree damage.
The group of 20 mainly academic economists and policy issued an open letter in which she said that replacing the state-based royalties in a fiscal resource rent offered a “superior” tax that would benefit Australians.
source:reuters
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