Resource company executives have called on Prime Minister Julia Gillard to avoid using May’s budget to announce any new policy announcements that would burden the sector.
Ms Gillard assured industry representatives her crackdown was directed at parts of the labour market that were softening, not the resources sector, when addressing a private roundtable hosted by the Chamber of Minerals and Energy of Western Australia.
The roundtable also involved discussion about how to assist small and medium sized miners attract foreign capital, with miners beseeching Ms Gillard to acknowledge that a strong currency and high labour costs is hampering the sector.
A surge in commodity prices has helped the Australian economy improve, according to the Westpac-Melbourne Institute leading Index. The index indicates the likely pace of economic activity three to nine months in the future and came in at 3.4 per cent, above its long-term trend of 2.7 per cent.
FNN asked UBS Investment Bank’s Chief Economist of Australasia Scott Haslem to shed some light on which commodities he thought could either fuel a pick up or be poised for weakness in 2013:
Our view has been that post the Chinese new-year that economic activity in China was starting to pick up. We can see the total social financing and the lending data in China has been quite strong, property is starting to improve. So if we do see a continuation of that strength and that build in China we’d expect to see a little bit more demand for iron ore coming through so we are looking for a little bit of upward pressure in prices in the very near term. But we do look out into the second half of this year and the mining companies are going to provide a lot more supply of these commodities. So we’ve got a bit of a short term squeeze in commodities but we think they’ll end the year much more around where they are or even lower.
To watch more of the interview click here.
BHP powers on and pays out
South African newspapers are accusing BHP Billiton Limited (ASX:BHP) of receiving preferential treatment, and of buying power for half the market price from power provider, Eskom. The global miner has held a contract with Eskom since 1992, and pays a set price at its aluminium smelters, a negotiated price it says is legally binding.
BHP Billiton has been fined over the death of a worker, almost five years ago. The global miner will pay 430,000 in compensation to the family of the Port Hedland worker, following an investigation by Western Australia's Department of Mines and Petroleum.
Down, down, prices are down!
Rio Tinto (ASX:RIO) says iron ore prices will be driven down in the second half due to rising supply and tepid demand. Pilbara iron ore boss Greg Lilleyman predicted depressed iron ore prices will make heavy work for the global industry.
Whitehaven Coal Limited (ASX:WHC) will cut 40 staff as part of cost cutting initiatives to support the ongoing viability of its Tarrawaonga and Rocglen open cut mines in New South Wales.
Hopes are fading for a successful takeover of Sundance Resources Limited (ASX:SDL) after China's Hanlong Mining failed to meet a critical funding deadline to prove it can finance the proposed $1.3 billion takeover.
Alacer Gold Corp (ASX:AQG) has committed to a $36 million budget to its Australian exploration program for 2013, with eight drill rigs currently in operation along a 3,400 kilometre tenement holding in Western Australia.
BHP Billiton Limited (ASX:BHP) is reportedly pushing ahead with the approvals process for a $10 billion floating LNG project in Australia, with energy giant and JV partner Exxon Mobil.