Rio Tinto's chief executive, Tom Albanese, broke his silence on Australia's proposed 40 per cent on profits in the mining industry yesterday, threatening to withdraw investment from the country.
The head of the Anglo-Australian company said he was shocked by the details of the tax, which the Canberra administration is hoping to get on the statute book by 2012. He also said that his company was being made to feel like a "foreigner" in Australia, despite employing "over 17,000 people and many more as contractors", Mr Albanese said. "We're the largest private employer of Aboriginals and we do take pride in our support and our contribution to Australian culture and our own Australian roots."
Analysts believe that Rio Tinto could see its effective tax rate climb to as high as 58 per cent if the tax is introduced. Mr Albanese said that the group would continue to invest in Australia, "but on different terms and under different risks". He said that Rio Tinto managers in Australia had been asked to "re-evaluate all new capital projects under the worst case tax scenario".
The group has said that its $116bn iron ore joint venture with rival BHP Billiton would not be affected by the tax. The deal is facing opposition from a number of groups, which argue that the plan would give them an unfair competitive advantage.