13 May 2010

Tax prompts Rio Tinto to review Australian projects

11:28 am on 13 May 2010

Rio Tinto is to review all new capital projects in Australia in response to the government's proposed super tax on mining companies.

Rio Tinto chief executive Tom Albanese criticised the Government's new 40% tax on above normal profits, saying it was understandably being labelled a nationalisation of mining and condemned it as a danger to investment.

Mr Albanese said he had asked his managers to re-evaluate all new capital projects under "worst-case tax scenario", the ABC reports.

Earlier this week rival BHP Billiton said a proposed uranium mine in Western Australia was under review as a result of the tax plans.

US energy firm Peabody cut its offer for Australian coal miner Macarthur and European energy firm Xstrata said it had suspended a $30 million copper exploration project in the country.

Energy company Santos last week deferred a decision on a liquefied natural gas terminal, while Cape Lambert Resources suspended all exploration in the resource-rich Pilbara region.

The Government hopes the new tax, announced on 2 May, will raise $A3 billion in its first year of operation from June 2012.