Rio Tinto shifts its stance on new tax

Rio Tinto, the mining group that analysts expect to be hardest hit by the proposed 40 per cent tax on resources groups' profits in Australia, said yesterday that it is not against a profits-based levy.

A raft of companies operating in mineral-rich Australia have hit out at the Australian government's plans to introduce a charge from 2012. Rio Tinto, along with BHP Billiton and Xstrata, has previously said that the tax would deter investment.

In an interview, the managing director of the group's coal business in Australia, Bill Champion, said a profits-based tax could be acceptable. "We aren't opposed to a profits tax, but we are interested in a tax reform that encourages investment," he said. He added that a 40 per cent levy was excessive. In a separate interview, meanwhile, the Australian Trade Minister, Simon Crean, said that while the government was open to talks on the tax, the 40 per cent rate was non-negotiable.