Miners wary of carbon tax

General News

Miners and manufacturers are the greatest opponents of the government’s carbon tax, with many fearing billions of dollars in extra production costs will make it more difficult to compete with overseas producers. Resources and mining companies dominating the headlines this past week include AJ Lucas’ 42 per cent owned Cuadrilla Resources found most likely responsible for triggering a number of seismic events in Britain, Beach Energy gains control of junior energy explorer Adelaide Energy, Extract Resources’ main shareholder Kalahari Minerals continues takeover talks and Sandfire Resources inks its first sales contract for output from its DeGrussa project.
Coal seam gas controversy hits AJ Lucas 
Drilling company AJ Lucas Group Limited (ASX:AJL) has hit the headlines after an investigation revealed it was “highly probable'' fracking conducted by its 42 per cent owned Cuadrilla Resources triggered a number of seismic events. A panel of experts has deemed that Cuadrilla, who explores for natural shale gas in North West England, likely caused significant tremors and aftershocks in the British town of Blackpool earlier this year. Fracking is also known as hydraulic fracturing and refers to the process in which the rock is fractured apart by high pressure mixture to extract coal seam and shale gas. Fracking is commonly used in the US and UK but its use is becoming increasingly controversial in Australia due to reports that it causes groundwater contamination and seismic activity. The company says it is now working to implement the report’s recommendations so that it can safely resume fracking operations.
Beach Energy forecasts gas price to rise 
Beach Energy Limited (ASX:BPT) has forecast gas prices on Australia’s east could jump from around $4 to $9 per gigajoule. The prediction came a week after fellow oil and gas producer Santos Limited (ASX:STO) said it believes increasing demand could see the price of gas more than double in the next 20 years. Meanwhile, Beach Energy gained control of junior energy explorer, Adelaide Energy Limited (ASX:ADE) only three days after launching a hostile bid.

Beach Managing Director, Reg Nelson said, “The takeover offer is a logical step for Beach that will remove our funding concerns relating to Adelaide Energy for the Nappamerri Trough unconventional gas work program”.
Kalahari continues takeover talks
Extract Resources Limited’s (ASX:EXT) main shareholder Kalahari Minerals says it’s still in takeover talks with a Chinese uranium company. Reuters reported the offer has "centred on a price below investors' expectations". Extract had been in a trading halt pending the announcement.  Extract has made submissions to the Australian Securities and Investments Commission in anticipation of an offer being made. The mining exploration company holds uranium deposits mainly in Namibia.
Dispute strikes Lynas rare earths deposit 
Lynas Corporation Limited’s (ASX:LYC) rare earths resource in Malawi has been caught up in an exploration licence dispute. Lynas completed its $US4 million purchase of the Kangankunde Carbonatite Complex in March this year, and at the time, outlined plans to ramp up the site’s development. The rare earths developer has now revealed a previous holder of exploration licences is disputing the lapse of their rights. The previous owner, who has not been named, now claims the Malawi government acted incorrectly by not renewing its licence to the Kangankunde tenements in 2003.
Sandfire inks first DeGrussa sales deal 
Sandfire Resources NL (ASX:SFR) has inked its first sales contract for output from its wholly owned DeGrussa copper-gold project in Western Australia. The copper and gold explorer has signed the contract with Swiss commodity trading company, MRI Trading AG. Under the one-year agreement MRI Trading will purchase 50 per cent of the direct shipping ore to be produced from DeGrussa, up to a maximum of 75,000 tonnes. Sandfire says it is at an advanced stage of discussions regarding the remaining ore, and expects to conclude deals in the near future.
Resources News
Miners and manufacturers are the greatest opponents of the government’s carbon tax, with many fearing billions of dollars in extra production costs will make it more difficult to compete with overseas producers. Under the carbon price legislation passed by Parliament last week, companies are set to pay a fixed price of $23 a tonne of emissions when the scheme starts in July next year. Rio Tinto Limited (ASX:RIO), (NYSE:RIO) chairman Jan du Plessis said concerns relating to the original resource super profits tax regarding international competitiveness still applied. BHP Billiton Limited (ASX:BHP), (NYSE:BHP) chairman Jac Nasser says the government should consider implementing the tax at a slower pace due to difficult economic conditions.
The steel industry is set to receive $300 million under the steel transformation plan. The government has set aside $180 million for BlueScope Steel Limited (ASX:BSL)and $120 million for OneSteel Limited (ASX:OST). The steel sector has faced job cuts and the pain of a high Australian dollar. Opposition senators voiced their concerns, saying the plan only supported two companies, calling it a “grubby deal” to buy support for the carbon tax.
Melissa Beaumont Lee