Mining giant Rio Tinto was refunded $74 million from the Australian Taxation Office on the sole quarterly payment it made in April, meaning it has paid no mining tax for the first year of the tax.
The company received the refund after an ATO assessment concluded it had paid too much.
According to The Australian, it was found last month Rio did not submit a payment for the June quarter.
The company revealed yesterday its West Australian iron ore ventures raked in profits of $US4.156 billion during the first half of 2013.
The profits were as expected by analysts but was down $US1 billion on this time last year due to falling commodity prices.
Rio said it made a payment for the March quarter but had not paid anything in the first half of 2012-13.
The March quarter payments were made when iron ore prices stood at $US150 a tonne. The company received its refund on these payments. Prices now stand at $US135 a tonne.
Companies have to forecast their exposure and submit payments once in three months under the mining tax, but they have to wait until the end of each financial year to ascertain the bill.
The Federal Government forecast $200 million income from the mining tax for 2012-13, calculated on the first three payments. This suggests the $74 million was paid in April, when the third tax payment was owed.
It was reported the first two payments had generated $126 million in mining tax revenue.
The mining industry is concerned Prime Minister Kevin Rudd may modify the mining tax to generate more income and recently warned him to leave it alone.
With news of Rio receiving a refund from the ATO, it now raises questions whether other miners such as BHP Billiton are in a similar position.
The issue comes on the back of the Rudd government’s revelation it has lowered its income forecasts of the mining tax over the next four years.
Last week’s pre-election mini-budget revealed the government expects the mining tax to generate $4 billion over the next four years.
This is considerably thinner than the initial forecast of $22.5 billion.
But Liberal senator Mathias Cormann said the budget needs to be revised in the wake of Rio’s refund.
“This casts massive doubt over Labor’s economic statement...because the revenue figures in it are clearly already out of date – again,” he said.
Rio head Sam Walsh refused to verify whether the company had been given a refund or whether it did not pay the fourth tax instalment last month.
“It (the MRRT) is basically working as it was intended, it was designed as a tax on super profits,” Walsh said.
“We’ve seen that iron ore prices have reduced and that as a consequence of that, we’re not seeing great triggering of the mining tax.”
Rio Tinto, BHP Billiton and Xstrata held discussions with Julia Gillard for a less rigorous version of the mining tax in 2010.
Meanwhile, after a year of attempting and failing, Rio is no longer divesting from Pacific Aluminium, Australasian aluminium assets, the SMH reported.
According to Rio, the company will incorporate Pacific Aluminium back under its larger aluminium umbrella. Walsh said the assets have to show improvement if it is to stay on in the company.
“I think the market was aware that Pacific Aluminium was not going to sell; I’m a realist, I’m a pragmatist; let’s get on with life.”
Walsh said recently the company would focus two thirds of its asset cuts on its aluminium and energy businesses.
The company hinted it will boost shareholder value by selling weak assets like its aluminium and diamond businesses.
Rio is also struggling to sell its iron ore business in eastern Canada. Prospects of investing $US5 billion in its Pilbara iron ore venture also looks doubtful following recent results.
It spent $US7 billion on capital expenditure in the first half of the year and is set to spend the same for the second half.
“We are expecting that capital will be $US 14 billion for this year...that will continue to allow us to bring the projects forward that are in the hopper,” Walsh said.