Rio Tinto criticizes on Australia's mining tax

08:20, May 31, 2010      

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Mining giant Rio Tinto Ltd on Sunday said the Australian federal government was attempting to become a "silent partner" in Rio Tinto's business, which made Australia the company's biggest concern in terms of sovereign risk.

Rio Tinto chief executive Tom Albanese said the federal government's proposed resources super profits tax had put Rio's billions of dollars of investments at risk.

"These are all now at risk for what is not just a change in the tax rate, this is half of our balance sheet at risk because we have someone now coming in to say: `I want to be your silent partner, I want 40 percent of your pre-tax profits and largely written-off assets'," Albanese said on the ABC's Inside Business program.

"These are tremendously large numbers, and this is a tremendously large risk - that's why I have said this is my number one priority on sovereign risk around the world."

Albanese has rejected any suggestion that it might be beneficial to have the government as a silent partner because it would not only share in profits but compensate mining companies if they were to make a loss.

"We plan for success, we don't plan for failure, and I don't think that we can take that to the bank," Albanese said.

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