Australian minister: Mining industry can afford to pay more tax

Rio Tinto's latest profit increase has proved the mining industry can afford to pay more tax, Australia's Resources Minister Martin Ferguson said on Wednesday.

The mining giant unveiled a strong jump in first half profit last week, with net earnings to July 30 of 6.38 billion Australian dollars (5.7 billion U.S. dollars), up 260 percent on the prior corresponding period.

The result followed weeks of heated debate over the federal government's proposed new 40 percent tax on mining company super profits.

Negotiations between the government and the three mining giants, Rio Tinto, BHP Billiton and Xstrata, finally saw a deal cut for a revised Mineral Resources Rent Tax of 30 percent for profits over 50 million Australian dollars (45 million U.S. dollars).

Ferguson said there was a tough argument about the nature of the tax, a balanced compromise was reached and people accepted that the industry should pay more.

"Just look at the Rio Tinto profits of last week, if you need any evidence of the capacity of industry to pay more," he told reporters.

"We're never going to please everyone but the government had to make a decision, there's a good return to the Australian community in terms of a bigger tax take."

Ferguson said his job if the Gillard government was re-elected was to get on with the implementation of the tax.

"I would want the principles and application wrapped up by Christmas, that's my work plan."

Source: Xinhua