Global miner Rio Tinto Limited
(ASX:RIO) has cautioned that hundreds more coal jobs are at risk following a decision from the Land and Environment Court this week. The court rejected Rio’s extension plans for its Warkworth project, a decision the miner says poses a direct threat to the 1300 workers that rely on the mine and sets a dangerous precedent for the NSW mining industry.
Miners battle against reduced prices and higher costs, in addition to increased anxiety surrounding the government approvals process. In addition, with a startling number of Australian thermal coalmines as well as the coking coal industry operating at a loss, there are fears government processes will drive investment offshore.
Stephen Galilee, chief of the NSW Minerals Council, believes the NSW planning system breeds uncertainty and stagnates the potential for ongoing coal investment: "They had an election commitment to have a full review of the planning system and unfortunately that review has now taken more than two years," according to Mr Galilee.
Economic news The federal government will reap just $800 million from the minerals resource rent tax (MRRT) in fiscal 2013, below half of its prediction from last October, according to a new forecast from the independent Parliamentary Budget Office (PBO). The controversial tax raised a paltry $126 million in its first six months of operation, tracking well below the government’s 2012 budget forecast of $3 billion in its first year of operation (downgraded to $2 billion). The PBO tabulated forward estimates to 2016/17, anticipating the MRRT will raise just $7.2 billion – just under $5 billion less than initial government predictions. Minerals Council of Australia chief Mitch Hooke surmised the revised estimates simply, citing the high dollar and low commodity prices before stating; “You can't get tax out of profits if the profits aren't there.”
The Australian Bureau of Statistics says Australia’s trade balance reversed 14 consecutive months of deficits to swing into surplus in March to come in at $307 million. Metal ores export earnings showed surprised analysts with a lack of strength, with iron ore rising only $1billion. This was significantly short of expert tips of a $1.5 billion increase, backed by higher volumes and higher prices.
Commentary Glenn Stevens, RBA Governor, this week touched on investment prospects likely to fill the breach when Resources investment dies away:
“With the peak in the level of resources sector investment likely to occur this year, there is scope for other areas of demand to grow more strongly over the next couple of years. There has been a strengthening in consumption and a modest firming in dwelling investment, and prospects are for some increase in business investment outside the resources sector over the next year. Exports of raw materials are increasing as increased capacity comes on stream. These developments, some of which have been assisted by the reductions in interest rates that began 18 months ago, will all be helpful in sustaining growth.”
Bonds...Canadian Bonds BHP Billiton Limited
(ASX:BHP)haspriced a Canadian $750 million bond issue at an interest rate of 3.23 per cent, due in 2023. The mining giant says the proceeds will be used for the refinancing of current debt maturities.
WorleyParsons Limited
(ASX:WOR) has won a contract to help develop the Kami Iron Ore project in Canada, worth an estimated $92.5 million.
BC Iron Limited
(ASX:BCI) Pilbara iron ore miner BC Iron and Cleveland Mining Co Limited
(ASX:CDG) will take a joint majority stake in three projects in Brazil. The miners have signed two agreements to earn the rights to acquire up to 80 per cent of three separate iron ore exploration projects in Brazil.
Fortescue fires up Fortescue Metals Group Limited
(ASX:FMG) has celebrated the opening of the Firetail iron ore mine at its Solomon development in the Pilbara. CEO Nev Power says the opening of the first stage of the $3.2 billion development was a major component of Fortescue’s production expansion slated for the end of this calendar year.
Whitehaven Coal Limited
(ASX:WHC) says its achieved record coal railings during the month of April. Whitehaven increased railings to 0.95 Mt in April, up from the previous record of 0.82 Mt in January this year. Managing Director Paul Flynn says the result reflects the continued ramp up of production at its Narrabri mine as the longwall moves into the advanced stages of its commissioning process.
