Mining tax embarrassment as Rio funds returned
Rio Tinto has paid no mining tax to the government during the first year of the controversial impost, after pre-payments made in April were refunded by the tax office.
In a blow to the Labor government less than a month before the federal election, review work by Rio and the tax office since June 30 has shown the multinational miner was not liable to pay any tax for the 2013 financial year.
The mining tax forces companies to estimate their exposure and make payments every three months, but the bill is not determined until after the conclusion of each financial year.
The revelation that Rio's pre-payments were refunded has raised the prospect that other companies such as BHP Billiton may have had their pre-payments refunded, too, and comes just a week after the Rudd government downgraded its revenue estimate for the tax over the next four years.
Last week's pre-election financial statement forecast the mining tax would raise $4 billion over the next four years, well below the original prediction of $22.5 billion.
Liberal senator Mathias Cormann said the refund could render last week's budget update out of date. "This casts massive doubt over Labor's economic statement ... because the revenue figures in it are clearly already out of date - again," he said.
News of Rio's mining tax refund came as the company revealed a $US4.2 billion underlying profit for the first six months of 2013.
That result was in line with analyst estimates, but $US1 billion lower than at the same time last year thanks to the same fading commodity prices hampering the mining tax.
The net profit was $US1.7 billion after a small impairment related to a wall slide at a US copper mine, and an accounting charge linked to the fall in the Australian dollar.
In a significant corporate development, Rio abandoned its attempt to divest itself of a cluster of Australasian aluminium assets - known as Pacific Aluminium - after more than a year of trying.
Many of the assets, including the Gove Alumina refinery in the Northern Territory, are losing money and attention will now turn to whether some assets need to be closed down.
Rio said it would integrate Pacific Aluminium back into its broader aluminium division, but when asked if the assets were good enough to stay on the company's books longer term, CEO Sam Walsh said: "I would like to see further improvement".
Rio Tinto shareholders will be paid an interim dividend of 83.5¢ a share.