Rio Tinto ‘will dispute’ £190m fine from Australian tax watchdog
Rio Tinto has been issued with a £186.36m fine from Australian authorities, according to a regulatory filing today, which the mining giant said it “will dispute”.
The fine, dished out by the Australian Taxation Office, was for denying interest deductions on an isolated borrowing that was used to pay an internal dividend back in 2015.
While the borrowing was repaid in 2018, Rio Tinto has also been requested to pay around £14.2m as part of an interest assessment, which the authorities reduced by around £10m.
Shares dipped 1.69 per cent to a total share price of 5,131.00 in its afternoon trading.
The London-headquartered mining giant defended its position, saying: “Borrowing to fund the payment of a dividend is a normal commercial practice. Rio Tinto is confident of its position and will dispute the primary tax and penalty assessments.
“Penalties and interest are not required to be paid until the primary tax matter is resolved.”
Rio Tinto added that, in accordance with its usual practice, it has paid half of the primary tax up-front as part of the objections process.
The Anglo-Australian mining giant, which recently came under pressure during the Juukan Gorge controversy, added that it has paid “more than A$8.4bn (US$6.4bn) of Australian income tax during the relevant period”, the equivalent to around £4.4bn.
Jukkan Gorge, a cave system near Pilbara in Australia that showed signs of continuous human occupation for over 46,000 years, was blown up by Rio Tinto knowingly last May.
The rock shelters were above about 8m tonnes of high-grade iron ore, with an estimated value of £75m.
An Australian parliamentary inquiry at the time found the iron ore giant to have gone against the wishes of traditional landowners despite knowing of the archaeological value. The inquiry report said: “Rio knew the value of what they were destroying but blew it up anyway.”
Morning Wire has contacted Rio Tinto for comment.