The Business Council of Australia (BCA) says high costs and low productivity are putting the country’s pipeline of investment in resources at risk.
Resources and mining companies making news include Aurora Oil & Gas getting ready to join the S&P/ASX 100 index, AGL raises $356 million under the institutional component of its $900 million capital raising, Whitehaven Coal announces all conditions for the sale of 10 per cent of its interest in the Maules Creek joint venture have been satisfied, NRW Holdings secures around $148 million of new contracts and contract extensions from Fortescue Metals and OM Holdings is awarded $5.7 million in damages relating to process plant design defects for the Bootu Creek Manganese Mine.
Resources NewsThe Business Council of Australia (BCA) says high costs and low productivity are putting the country’s pipeline of investment in resources at risk.
“We are becoming a high-cost and thus high-risk place to invest, and low labour productivity compared to other nations has reduced the competitiveness of our project delivery,” said BCA President Tony Shepherd.
“This is not only placing future projects at risk but is also undermining the efficiency of existing projects ... Half of the $921 billion pipeline is not yet locked in, and how much of it gets delivered will depend on taking the steps required to make our economy more competitive,” added Mr Shepherd.
The study revealed Australian resources projects are 40 per cent more expensive to deliver, and labour up to 60 per cent less productive than in the US Gulf Coast. Additionally, the research showed productivity issues, labour shortages and planning approvals and conditions are contributing to project costs and delays.
Aurora joins S&P/ASX 100 Aurora Oil & Gas Limited
(ASX:AUT) will join the S&P/ASX 100 index effective from June 15 following recent adjustments to the indices.
Chief executive Jonathan Stewart said, “Aurora’s inclusion in the S&P/ASX 100 Index reflects the successful transition from exploration success to a rapidly growing international oil and gas producer”.
AGL capital raisingAGL Energy Limited
(ASX:AGK) has completed the initial issue of fully paid ordinary shares following the entitlement offer announced on the 24th of May. AGL has raised $356 million, issuing 31 million new shares under the institutional component of the entitlement offer. The retail offer will close on Tuesday June 19.
Whitehaven’s Maules Creek dealWhitehaven Coal Limited
(ASX:WHC) has announced all conditions for the sale of 10 per cent of its interest in the Maules Creek joint venture to J-Power have been satisfied. A completion date of June 19th has now been confirmed. In October Aston Resources, now a wholly-owned subsidiary, announced a conditional agreement for the sale for $370 million. Whitehaven says the deal is significant as it will provide a substantial portion of the funding for the development of the project.
NRW’s new Fortescue contractsNRW Holdings Limited
(ASX:NWH) has secured about $148 million of new contracts and contract extensions from Pilbara focussed iron ore miner Fortescue Metals Group Limited
(ASX:FMG). The mining services company has been awarded a $70 million contract to work on Fortescue’s Solomon Spur Rail Project to construct 28.4 kilometres of rail earthworks. The company has also received $70 million for a variation to the Solomon early mining services contract, adjusted to include the construction of Tailings Storage Dam Facility. And finally, the company has won an $8.5 million contract for work on Fortescue’s Christmas Creek project.
OM Holdings scores $5.7M court win OM Holdings Limited
(ASX:OMH) has been awarded $5.7 million in damages relating to process plant design defects for the Bootu Creek Manganese Mine.The diversified minerals group discovered the defects upon commissioning of the mine during 2005 and 2006 and launched the claim to recover the cost of rectifying the problem. The Supreme Court of Western Australia has now ruled OM has been successful in its action against the process plant design engineers who the court says were negligent and breached the duty of care.
