News & Current Affairs
10 August 2014
Rio Tinto profit more than doubles
Surely some can be set aside for Social Programs
Rio Tinto has more than doubled its half year profit to $US4.4 billion.
Rio Tinto has more than doubled its half year net profit to $US4.4 billion ($A4.76 billion).
The world’s second largest miner’s profit was below consensus analyst expectations of $US4.57 billion.
The result was an improvement on a $US1.7 billion net profit in the first half of 2013.
Underlying earnings, which strips out $US843 million in one-off impairment charges, was up 21 per cent to $US5.1 billion ($A5.52 billion).
Chief executive Sam Walsh said the result was outstanding considering weaker commodity prices.
Iron ore earnings of $US4.7 billion dominated the result, but the biggest profit growth came in aluminium and copper, with 74 per cent and 71 per cent rises respectively.
Rio Tinto’s interim dividend of 96 US cents per share is up 15 per cent from a year ago, in line with expectations.
The mining tax on super profits was a correct policy. Remember that the above figures are after tax, after salary, profits. Profits that are due to investors as dividends. There's nothing wrong with that per se, but morally a 1% tax on these super profits would go a long way if they were redirected into social programs.
Joe Hockey has bleated since the budget that 'the age of entitlement is over'. So, why is it that the mining companies think they are entitled to keep all that is rewarded from raping the earth. Minerals below ground should belong, in part, to ALL the inhabitants of the sovereign territory in which the stuff was found.
Mining companies also whinge 'but we already pay tax', which they do. But is it enough? The way in which tax is affixed to mining companies is a fickle affair. It has to take into account the mammoth investments they make before turning a profit. But when all is said and done, the amount of tax paid on profits is disproportionate to the amount of those profits. So, when a company makes a whopping $4.7 Billion 6 month profit, surely 1% of that hardly makes a dent (about $0.01c per share).
However $47 million dollars deducted from, say, a social security bill, is a huge turnaround.
A 1% tax on Super Profits is correct policy