Rio Tinto: Australian investment and taxation payments

Rio Tinto today released figures confirming the level of direct taxes paid in Australia and its investment in Australian operations.

More than A$20 billion was paid in corporate taxes and royalties alone in the past 10 years. Rio Tinto’s effective tax rate averaged more than 35 per cent. About three quarters of these taxes and royalties have been paid in the past five years, underlining our growing tax contribution.

Rio Tinto Chief financial officer Guy Elliott said the data, verified by independent external auditors PricewaterhouseCoopers, would help end much of the uncertainty created by contradictory information that had emerged since the Government’s proposed mining super tax was announced on 2 May 2010.

“These figures confirm previous statements made by Rio Tinto about the level of tax paid in Australia. Misleading information propagated by other parties has not facilitated a proper dialogue about the importance of the minerals sector to all Australians. That’s why we thought it was important to get the facts out there,” Mr Elliott said.

“The details we are releasing today leave no room for doubt about Rio Tinto’s substantial contribution to Australia and the Australian economy,” he said.
“Put simply, these figures demonstrate that Rio Tinto, one of Australia’s biggest taxpayers, pays its fair share of taxes. It should also be emphasised that the data shows Rio Tinto has effectively invested all of its Australian profits, and more, back into Australia in the past decade.”

In Australia, Rio Tinto’s tax payments include royalties on the value and/or the volume of minerals extracted, in addition to company tax levied on the taxable income of the business.

In the past five years alone, Rio Tinto paid A$11.2 billion in company tax and A$4.1 billion in royalties. The effective rate of taxation during that period averaged 34.7 per cent.

Corporate taxes amounted to A$14.6 billion and royalties were A$5.7 billion in the period 2000-2009. Rio Tinto’s rate of taxation over the 10 years to 2009 averaged 35.6 per cent of its earnings before tax payments in Australia.

Corporate tax and royalties

Time period 2000-2009 2005-2009
Corporate Tax 14.6b 11.2b
Royalties 5.7b 4.1b
Total Direct Taxes 20.3b 15.3b
Effective Tax Rate 35.6% 34.7%

Rio Tinto has generated net profit after tax of A$37.4 billion in Australia in the 10 years to 2009. During the same period the company re-invested more than A$38 billion back into Australia through capital expenditure (A$26.4 billion) and acquisitions (A$12.0 billion).

Investment in Australia

Time period 2000-2009
Net Profit After Tax 34.7b
Capital Expenditure 26.4b
Acquisitions 12.0b
Total investment in Australia 38.4b

*All figures in Australian Dollars

PricewaterhouseCoopers verified the financial data set out above against information presented in the Rio Tinto Group’s audited financial statements and/or its income tax returns for the years 2000-2009. Effective tax rates have been calculated on a calendar year basis in line with our audited accounts.

Rio Tinto reiterates its desire to work constructively and cooperatively with the Government to engage in genuine tax reform that helps promote investment, create jobs and protect Australia’s international competitiveness.

About Rio Tinto

Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Rio Tinto’s business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.

Contacts:

Media Relations London
Christina Mills
Office: +44 (0) 20 7781 1154
Mobile: +44 (0) 7825 275 605

Faeth Birch
Conor McClafferty
Clare Hunt
Office: +44 (0) 20 7781 1138
Mobile: +44 (0) 7920 041 003

Media Relations, US
Tony Shaffer
Office: +61 (0) 3 9283 3612
Mobile: +1 202 256 3667

Media Relations, Australia
David Luff
Office: +61 (0) 3 9283 3620
Mobile: +61 (0) 419 850 205

Media Relations, Canada
Stefano Bertolli
Office +1 (0) 514 848 8151
Mobile +1 (0) 514 945 1800

Investor Relations, London
Mark Shannon
Office: +44 (0) 20 7781 1178
Mobile: +44 (0) 7917 576 597

David Ovington
Office: +44 (0) 20 7781 2051
Mobile: +44 (0) 7920 010 978

Investor Relations, North America
Jason Combes
Office: +1 (0) 801 204 2919
Mobile: +1 (0) 801 558 2645

Investor Relations, Australia
Dave Skinner
Office: +61 (0) 3 9283 3628
Mobile: +61 (0) 408 335 309

Simon Ellinor
Office +61 (0) 7 3361 4365
Mobile +61 (0) 439 102 811

Further information:

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