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Rio denies projects shelved over tax

Mining giant Rio Tinto Ltd says it is reviewing the potential effect of the federal government's proposed new resources tax but has not yet decided to shelve any projects.

The statement from Australia's second largest resources company followed a report in The Australian newspaper on Thursday that Rio Tinto planned to shelve $11 billion earmarked for expanding its Western Australian iron ore operations.

"Rio Tinto today confirmed that no decision has been made to shelve any projects in Australia following the announcement by the federal government of the proposed resource super profits tax (RSPT)," Rio Tinto said in a statement on Thursday.

"Rio Tinto is reviewing the potential impact of the proposed RSPT on all of its operations and new projects in Australia.

"The feasibility study into the proposed the 330mtpa (million tonnes per annum) expansion of Rio Tinto's iron ore operations in Western Australia is continuing as previously advised.

"Rio Tinto is however unable to determine the impact of any RSPT on the 330mtpa expansion study until the details of the government's proposal become clearer," the company said.

On Thursday, Resources Minister Martin Ferguson said he expected mining and energy companies to reassess investments as they determined the effect of the new tax on their operations.

"In the short term yes, companies will reassess their investment decisions because they don't know the final details of the government announcement of last Sunday," Mr Ferguson said in Melbourne.

"It's the responsibility of the CEO and board of directors.

"I am not surprised at that," he said.

The government expects the new tax to raise $12 billion in its first two years of operation.

Rio Tinto shares closed down $2.59, or 3.79 per cent, at $65.69.

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