Rio Tinto criticises Canberra tax plans

Rio Tinto yesterday criticised a controversial new resource tax imposed by the Australian government, saying it could erode the country's competitiveness, curtail investment and limit jobs growth. Prime Minister Kevin Rudd announced at the weekend that a 40 per cent tax on profits at the big mining companies would be introduced in 2012, raising an additional A$9bn (£5.5bn) a year.

Shares in Rio Tinto fell 4.3 per cent, and rival BHP Billiton gave up 3 per cent by the market close in Australia yesterday. David Peever, managing director of Rio Tinto Australia, said the company had concerns about the tax and the "apparently arbitrary" level.

"Taxing 40 per cent of profits over the long-term bond rate, together with corporation tax, would make the Australian minerals sector the highest taxed in the world, seriously eroding competitiveness," he said.