Speaking at the Commonwealth Business Forum yesterday, Rio chief executive Tom Albanese said the company was confident its investment in its African operations, which include Simandou, would make healthy returns.

“I’ve had a long belief that Rio has been under-invested in Africa,” Albanese said.

“The next generation of the world’s greatest resources will be in Africa, I am convinced of that.”

Albanese said Africa’s natural resources had been under-explored.

“It actually has much more potential to deliver product and valuable material to the world markets,” he said.

The potential to deliver natural resources will become increasingly important as China continues to expand and grow and the rest of the emerging world continues to develop, Albanese says.

The discussion about whether it is best for governments to achieve returns through a taxation and royalties scheme, through part ownership, or a combination of both differ from country to country, says Albanese.

"One size doesn't fit all,” he said.

“[But] if you speak with a finance minister, someone from the treasury side of the country, they will recognise that the appropriate taxation royalty regime actually pays economic rent to the country in good times and bad.

"It's something that people can build budgets around and build the various other programs that may be needed within the government to finance the activities of the country.”

Albanese said it was important that funds companies such as Rio provided were seen to “flow through in a way that is transparent”

“As an investor, it provides assurance and it also provides commitment from the host country that they... basically have a place with safety to invest,” he said.

“I am a big fan of the Extractive Industries Transparency Initiative.”

Albanese said in the past 10 years, Rio had done a better job at a local level in addressing the highest standards of environment, employing health and safety measures, as well as community engagement.

But he said Rio needed to increase its engagement with governments in host countries on a national level to improve relationships.

“I think this is something we [Rio] as an organisation recognise this and we are learning from,” Albanese said.