Rio warns Australian Government over tax reform surprises

The Australian public aren’t the only people shaken by Liberal Government scaremongering in the lead up to the release of the new budget on May 13.

Rio Tinto iron ore boss Andrew Harding has voiced his displeasure at the prospect of further tax changes for big miners in Australia, warning that the government should not introduce any more surprise tax changes  that would affect foreign investment.

At a business lunch in Perth Harding said “It really does startle an organisation”.

Harding’s threats were barely veiled on the subject of Rio Tinto taking their business elsewhere.

“Australia’s not the only place you can mine iron ore,” he said.

“There’s an awful lot of high grade iron ore sitting in Africa, and for a whole lot of instability reasons it hasn’t been mined to date.”

Rio Tinto has recently launched a legal battle with Brazilian iron ore miner Vale, over allegations of bribery and conspiracy to steal mining rights for the Simandou deposit in Guinea in west Africa.

In the filed complaint, Rio stated that negotiations between it and Vale started in 2008, and Rio provided the information regarding Simandou.

It stated that “as Vale quickly surmised, gaining control of the Simandou deposit would strengthen Vale's position in the world's high-grade iron ore market, since the only other comparable source is Vale's own Carajas Iron Ore Mine in Brazil”.

Harding said that volatile industrial relations and disruptions to the supply of iron ore several decades ago in Australia allowed Brasil to build the biggest iron ore business in the world.

Harding also said he is not worried by recent price volatility and two year lows for the price of iron ore.

“The reality is that I don’t actually care about it because the issue is the long term,” he said.

Harding said the indicator he watches for long term trends is the Chinese urbanisation rate, or population living in urban areas, expected to remain strong for another decade.

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