Rio Tinto has warned the new resources tax announced by Australia’s Federal Government could erode the country's competitiveness, severely curtail investment and limit jobs growth.

The warning comes just a day after mining giant BHP Billiton expressed its disappointment with the plan, which would result in an increase in the total effective tax rate on the Group's profits earned from its Australian operations from around 43% currently to around 57% from 2013.

Rio Tinto Managing Director Australia David Peever has rejected suggestions that the Australian community was not extracting a fair return from the growth in the mining sector, noting the industry already pays more tax than other parts of the economy. In addition to diamonds, Rio Tinto's major products include aluminium, copper, coal, uranium), gold, industrial minerals and iron ore.

"All Australians benefit from a strong mining sector. In the same way all Australians are affected by measures that hurt the mining sector. Australia was saved from the worst of the GFC by the strength of the resources sector, but the same industry is now being portrayed by the Government as not paying its way,” says Peever.

"Periods of high commodity prices also give the industry the capacity to invest through the cycle and to return value to ordinary shareholders,” explains Peever.

BHP Billiton Chief Executive Officer Marius Kloppers notes, "The stability and competitiveness of the tax system have been central to the investment in resources in Australia. If implemented, these proposals seriously threaten Australia's competitiveness, jeopardize future investments and will adversely impact the future wealth and standard of living of all Australians."