UPDATE: Rio Tinto Says Australian Carbon Scheme To Cost Jobs

Rio Tinto Ltd. (RTP) said Friday Australia's proposed carbon pollution reduction scheme, or CPRS, needs to be amended or it will hurt the nation's mining industry and cost jobs.

In its strongest statements to date on the scheme, the miner proposed four amendments it said should be made before the legislation is passed through parliament.

"Without these changes, the CPRS legislation will affect the international competitiveness of Australian resources companies and will have long-term consequences for Australian jobs and the Australian resources sector's ability to compete in global markets," Rio said in a statement.

Australia's center-left Labor government plans to introduce a cap-and-trade scheme - similar to one operating in Europe since 2005 - that would cap carbon dioxide emissions from July 2011, forcing heavy polluters to account for their greenhouse-gas emissions. But its first attempt at legislating the scheme was rejected by a hostile Senate in August.

Rio's comments appear to be directed as much at the main opposition conservative Liberal-National coalition as at the government, with coalition lawmakers due to meet Sunday to decide on amendments to the carbon scheme they hope to extract from the government.

The government is due to reintroduce its climate change legislation into parliament in November, and has indicated a degree of willingness to negotiate with opposition lawmakers to push the scheme through.

Labor has a majority in Australia's lower House of Representatives, but needs the Senate support of either the conservative coalition, or all seven minor party senators, to pass any new laws.

Coalition leader Malcolm Turnbull has previously flagged that conservative lawmakers may seek further compensation for electricity generators, as well as concessions for the coal industry and agriculture - key export sectors that may otherwise struggle to compete against nations that don't have a carbon scheme in place.

Rio said the current scheme disproportionately impacts the coal, aluminum and alumina industries and threatens the viability of low-emissions technology.

It called for amendments to the scheme to ensure fair treatment of the coal industry and to support low-emissions technology.

The miner also called for changes to the point at which a carbon liability is imposed to ensure the carbon price signal works effectively.

The annual permit reduction for trade exposed industries should also be removed until international competitors face similar carbon constraints, Rio said.

-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094; [e-mail]