Australia to propose tax incentives for critical minerals
The proposed law will set up a tax incentive worth 10% of relevant processing and refining costs for 31 critical minerals.
Rio has been a massive driver of expansions, adding millions of tonnes of seaborne supply to the market, with more to come.
Giant miner Rio Tinto (LON, ASX:RIO) said Monday it is more than pleased with its current exposure to iron ore, despite the struggles of the steel making commodity this year.
Speaking to The Australian, chief financial officer Chris Lynch said the company had no plans for acquisitions purely to diversify the business away from iron ore, a commodity that has lost about 30% of its value this year.
“Any investment we make will always be based on value,” he was quoted as saying. “We’ll never target diversification as a primary objective,’’ Lynch added.
The company’s optimism seems to stem from its continued expansion of its lower-cost iron ore output, a managed introduction of new supply from major producers, and a hope that Chinese dynamics surprise on the upside.
Whatever Rio thinks about iron ore matters…a lot. Over 96% of its net earnings last year derived from the commodity. Iron ore also dominates the company’s 2014 estimated revenue and EBITDA profiles at 50% and 83%, respectively.
Rio has been a massive driver of expansions, adding millions of tonnes of seaborne supply to the market, with more to come.
Early last year, the firm announced it had decided to prioritize capex at its Australian mines in the Pilbara region, home to the world’s largest known steel making material deposit, over Simandou, its ore project in Guinea.
And last May, the Guinea government, Rio and its partners — China’s Chalco and the World Bank— inked a game-changing $20 billion deal for the southern section of the iron deposit, which is expected to produce about 100 million tonnes a year.
