Aussie carbon tax slammed by mining giant

Mining giant Rio Tinto has come out swinging against the carbon tax proposed by the Australian government.

The Australian mining industry has come out swinging against the carbon tax proposal announced by the country's Prime Minister, Julia Gillard.

The proposal, announced yesterday by Prime Minister Julia Gillard and treasurer Wayne Swan, was part of the Australian government's plan to cut carbon pollution, drive innovation and help avoid the increased costs of delaying action on climate change, Ms Gillard said.

Under the plan, Australia will cut 159 million tonnes a year of carbon pollution from its atmosphere by 2020 – the equivalent of taking over 45 million cars off the road.

The carbon price will change Australia’s electricity generation by encouraging investment in renewable energy like wind and solar power, and the use of cleaner fuels like natural gas, Ms Gillard said.

However, international mining company Rio Tinto said it was disappointed in the proposal, which it described as an unfair tax.

“We are deeply concerned the proposed carbon tax fails to shield Australia's export sector and leaves it at a disadvantage compared to international competitors,” Rio Tinto managing director Australia David Peever said.

"It is crucial that Australia's contribution to the global effort is in proportion to action being taken by overseas trading rivals, so as not to disadvantage important trade-exposed industries."

Mr Peever said suggestions for alternative policies and concerns raised by Australian industry in the Government's climate change business roundtable had not been addressed and the reduction in the diesel fuel excise rebate included in the proposal represented extra tax forced on the Australian mining sector without any consultation.

Australia's minerals sector now faced significant additional costs not faced by competitors, Mr Peever said.

“This will inevitably reduce potential investment and jobs growth in Australia, without reducing global emissions.”

He said the carbon price would lock in significant extra costs for Australian exporters in general.

"The proposed scheme places an arbitrary cost on Australian exporters that is not aligned with the cost being borne by competitors.

“It is an unfair impost on Australian exporters, not just the minerals industry, but the whole Australian export sector.

"We need an approach that starts modestly, is phased in to allow for an orderly adjustment in the economy, and only reduces protection for important trade-exposed industries in line with clear evidence of the costs being borne by international competitors."