Rio Tinto (ASX:RIO): Asian Customers Very Concerned about the Super Tax

Sydney, May 25, 2010 AEST (ABN Newswire) - Global giant Rio Tinto called Australia's planned new mining tax its top regulatory threat worldwide Monday.

Chief executive Tom Albanese said the tax, which has prompted a coordinated opposition campaign by the industry, had already damaged Australia's reputation. Rio Tinto says its Japanese, Chinese and Taiwanese customers have expressed that they are "very, very concerned" about the proposed tax, while the iron ore prices are significantly surging.

Rio Tinto confirmed Friday that it has reached an iron ore price agreement with major Asian steel mills for April to June, except those in China, with prices believed to nearly double the prices a year earlier.

Nikkei reported that Japanese steelmakers have reached an official agreement with Brazilian and Australian resource giants for the April-June period. Prices for iron ore powder was set at about US$110 per tonne for Brazilian powder and about US$120 per tonne for Australian Powder, in line with market expectations. The new prices are understood to be based on the quarterly spot prices from January to March this year.

The July-September period is expected to see another 30-40 per cent prices hike due to the surging demand from China. Chinese steel makers also said they have received notice from BHP Billiton and Vale that they will increase third quarter iron ore prices to A$160 a tonne.

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Michelle Liang Asia Business News Asia Bureau Tel: +61-2-9247-4344 Email: michelle.liang@abnnewswire.net