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Grylls iron ore tax plan outrages BHP, Rio

AAP logoAAP 9/08/2016

Rio Tinto and BHP Billiton have labelled the reinstalled WA Nationals leader's plan to slug them with higher taxes "ill-conceived" and "damaging".

Brendon Grylls has ousted Terry Redman from the helm after three years on the backbench, and wants the two mining giants to pay an extra $5 per tonne tax on iron ore.

Both companies responded sharply, saying a stable operating environment was crucial, and they already paid a lot of tax and provided thousands of jobs.

Rio Tinto warned Mr Grylls' proposal would have severe knock-on effects on investment, suppliers, communities and shareholders at a time of global economic uncertainty.

"There are no grounds for a new mining tax in Western Australia and it should not be adopted as Nationals policy," the company said in an emailed statement.

"An ill-conceived tax grab will place ... local jobs and the growth of Rio Tinto's iron ore business at risk."

BHP Billiton said the company was concerned about the "damaging" plan.

"We do not understand why a proposal that is so discriminatory and uneconomic would be targeted at two companies," it said.

"Miners in Western Australia are operating in an international market and we have to be able to compete or will lose market share."

WA's Chamber of Minerals and Energy said the short-sighted plan put at risk the state's title as the world's most attractive place for mining investment, according to respected think-tank the Fraser Institute.

"The suggestion of increasing discriminatory government charges on specific companies is a strong deterrent to investment," chief executive Reg Howard-Smith said.

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