Rio Tinto has denied that it will shelve its iron ore expansion plans in Western Australia on the back of the federal government's proposed super profit tax.
The Australian newspaper this morning reported that Rio Tinto will put $11 billion worth of expansion plans on the backburner, making the global mining company the latest miner to rethink its investments in the country.
It was reported that Rio Tinto Australia chief executive Sam Walsh said that plans to lift the miner's Pilbara iron ore output from 230 million tonnes to 330mt by 2015 were on hold.
However, a company spokesperson told WA Business News that Rio Tinto had not made any decision with regards to any of its Australian operations following the uncertainty created by the release of the Henry tax review on Sunday.
Rio Tinto had put on hold its iron ore expansion plans at the height of the global financial crisis but resurrected the plans, which it is still investigating, in October last year.
On Sunday, Prime Minister Kevin Rudd announced a proposal to tax the super profits of miners at a rate of 40 per cent, causing outroar from the sector.
Mining magnate Clive Palmer was one of the first mining chiefs to come out and say that he would reconsider some of his Australian projects, while Tony Sage-led Cape Lambert said it would cancel all exploration work at its Pilbara iron ore project and turn its focus overseas.
Mr Rudd has been meeting with mining executives in Western Australia over the past two days listening to concerns on how the proposed new tax will impact the mining sector.
Some political commentators have suggested that Mr Rudd's eagerness to listen to what mining executives had to say was possibly an indication that the proposed policy will be watered down before its planned introduction date of 2012.
