RIO Tinto will pour $US400 million ($450m) into re-starting its Canadian iron ore expansion program, as it assesses its Australian operations in the wake of the Rudd government's resources super-profit tax.

Rio Tinto chief executive iron ore Sam Walsh said today the decision to re-start the expansion highlighted the “attractiveness of investing in Canada”.

Mr Walsh’s comments came two days after he flagged that the miner’s plans to boost Pilbara iron ore production capacity from 230 million tonnes a year to 330 million tonnes by 2015 had been put “on hold” as the company digested details of the new 40 per cent tax.

“We've got our projects on hold while we try to understand the ramifications of a 40 per cent increase in taxes,” Mr Walsh said earlier this week.

Rio also reaffirmed yesterday it was reviewing the potential impact of the Rudd government's proposed resource super tax on its Australian operations and new projects.

A Rio statement yesterday said: “Rio Tinto is reviewing the potential impact of the proposed RSPT on all of its operations and new projects in Australia”.

Australia’s mining industry has staged a high-level campaign against Mr Rudd and his government’s new mining tax plans, with one of Australia's richest men, Fortescue Metals chief Andrew "Twiggy" Forrest weighing into the debate yesterday.

Mr Forrest joined the rest of the big players’ calls that the tax could jeopardise his multi-billion-dollar expansion plans.

He also accused the Prime Minister of misleading the Australian people over the nature of the tax, and labelled the plan - under which the government would share in 40 per cent of profits and losses of projects - as "nationalisation of the mining industry".

Gas producer Santos also joined the growing calls of objections yesterday by deferring for up to six months a decision on whether to build a $15 billion LNG export terminal in Gladstone.

Origin Energy, British-based BG Group and Arrow Energy and Royal Dutch Shell, which all have LNG plans in Queensland, have also all said they are reassessing development plans because of the new tax.

Rio’s investment in its Canadian operations is the first stage of a three-stage expansion programme at its Iron Ore Company of Canada operations that could increase concentrate annual capacity to 26 million tonnes.

It was initially approved in March 2008 but suspended later that year as the global financial crisis impacted markets worldwide.

Mr Walsh said the investment decision in Canada highlighted the degree of confidence in growing demand for iron ore and the quality and potential of its Canadian assets.

“Some uncertainty and potential volatility remain about global economic recovery, but global iron ore and steel markets have rebounded strongly and demand growth looks set to continue,” he said in a statement.

 Sourced from www.theaustralian.com.au