Australian mining companies BHP and Rio Tinto are set to benefit from Australian taxpayers’ money to help fund global expansion projects.
The $US100 million ($110.6 million) loan is to fund a mining joint-venture run by BHP Billiton and Rio Tinto in Chile, South America.
The $110.6 million loan to two of Australia’s largest and most profitable companies comes amidst recent criticism of EFIC from the Productivity Commission, which advised the corporation to spend its money on helping smaller companies to secure finance, rather than allowing the big multinationals to dip their hands in the pot.
“a unique opportunity to benefit from loan repayments”
The loan to Rio Tinto and BHP is purely an Australian government investment as it sees a unique opportunity to benefit from loan repayments. It’s understood the cash will be lent to a holding company called Minera Escondida Limitada, which is 57.5 per cent owned by BHP and 30 per cent owned by Rio.
The remaining interests in the project lie with Japanese companies Mitsubishi and Nippon Mining.
Minera Escondida is the joint venture through which the miners operate the Escondida copper mine in Chile, and the money is designed to help Australian companies win work on a $US3 billion expansion of what is already the world’s biggest copper mine.
“the linchpin to supporting around 80 Australian companies”
EFIC spokesman Peter Field said Australian mining companies like BHP and Rio Tinto were the linchpin to supporting around 80 Australian companies win their own export contracts on the Chilean mining project. ‘
‘This has opened up an opportunity to these 80 Australian companies to pitch their wares and they have all now been contracted to provide their inputs,” Mr Field said.
”From our perspective this is all about Australian jobs,” he said.
About Australian mining companies BHP & Rio Tinto
BHP is Australia’s largest company and recently reported an $US8.1 billion profit for the six months to December 31 2013.
Rio Tinto is the 11th largest company trading on the ASX and made underlying profits of $US10.2 billion in the year to December 31.
BHP paid about $US9 billion worth of taxes to Australian state and federal governments in 2013. Rio Tinto a slightly lesser amount totalling $US5.7 billion.
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