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Aust could be world's mining hub: Rio

AAP logoAAP 25/11/2016 Trevor Chappell

Australia could become the epicentre of global mining if it had more ambition, says the chief executive of mining giant Rio Tinto.

Jean-Sebastien Jacques told the Melbourne Mining Club that Australia has a vital role to play as the mining industry searches for new ways to address issues such as safety, the environment, diversity and inclusion, and explaining to people how the mining industry contributes to modern life.

"I would go as far as to say that Australia should raise its ambition as it has a unique opportunity to become the epicentre of the global mining industry," Mr Jacques said on Friday.

To position itself as the backbone of the mining industry, Australia needs to first position itself as the financial centre for mining.

The uncertainty of Brexit in the UK and the recent election of Donald Trump as US president represented an opportunity for Australia to gain ground on London and beat Vancouver as the places that the mining industry wants to place its dollars and its best people.

Mr Jacques said Australia could form alliances and partnerships with financial markets in Singapore and Hong Kong.

But importantly, Australia first had to become a less expensive place in which to do business - for example, by cutting the corporate tax rate.

Mr Jacques pointed to Australia's corporate tax rate of 30 per cent - one of the highest in the developed world - which looked very uncompetitive when the UK and Mr Trump in the US have been talking about cutting corporate tax to 15 per cent.

Australia should also be the global mecca of mining technology in the same way that the US is with the internet, smart phones, software and space exploration.

This would need a united effort from business, government, investment capital and universities, and may take 10 years.

Mr Jacques also said Australia should take the lead again on mining industry partnerships, such as it did in the early 1960s, when it opened up the Pilbara region in Western Australia to iron ore mining.

Financing came from North American banks, and new relationships were forged with Japan.

"It is clear that forming new partnerships can deliver significant value, and indeed, sometimes your customers can be your best equity partners," Mr Jacques said.

Mr Jacques also hit out at a $5-per-tonne iron ore tax proposed by West Australian Nationals leader Brendon Grylls.

Mr Jacques said the $5-per-tonne tax proposal was not just an issue for Rio Tinto and fellow mining giant BHP Billiton, but for Western Australia and the entire country.

The tax, if it came to fruition, could make Australia the most taxed mining destination in the world.

"If we end up in the situation where we are the most highly taxed country in terms of mining, guess who's going to win?" Mr Jacques said.

""I can tell you. It's going to be very simple. It's going to be Brazil."

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