Taxpayers footing the bill for overseas Rio Tinto mine

AUSTRALIAN taxpayers will help Rio Tinto to fund a $US5.1 billion mine expansion in Mongolia, after Australia's export credit agency decided to continue its controversial habit of lending to multinational corporations.

Despite pleas for it to focus on small and medium exporters that cannot source loans elsewhere in the market, Australia's Export Finance and Insurance Corporation confirmed that it would participate in financing the second stage of Rio's Oyu Tolgoi mine.

A spokeswoman for EFIC would not reveal the size of the loan, but the organisation typically lends in the tens of millions, or hundreds of millions of dollars.

Rio has reportedly secured at least half of the $US5.1 billion in finance required to build the expansion, with the World Bank's International Finance Corporation among those committed to the project.

EFIC's decision to lend money to Rio comes despite Australia's Productivity Commission urging the organisation to ''substantially reorientate'' its focus toward small exporters, rather than big companies that can easily source money elsewhere at low interest rates.