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North Australia Digest – 24/10/12

by 24 October 2012

The Australian

Queensland mining companies believe Premier Campbell Newman’s decision to overturn the 23-year ban on uranium mining indicates the industry is ‘becoming normalised’ and opens up huge opportunities for the state’s economy.

Julia Gillard announced yesterday that developing a national soil health strategy would be a top priority for her government. Such a strategy will be vital as farmers are being asked to double food and fibre production by 2050.

Ferngroves Wines director Anthony Wilkes says he has had only positive experiences with foreign investment on his West Australian winery. It has allowed him to buy and plant an additional 100 hectares of vines, new tractors, oak barrels and expand more modern wine-making facilities.

In a separate article, Canada’s Laramide Resources chief executive Marc Henderson said the Queensland government’s decision to lift the ban on uranium mining could see Australia becoming the ‘default natural supplier of choice’ to all Western utilities.

BP Australasia president Paul Waterman criticised government policies that drive up costs for resource companies and affect job creation opportunities, saying ‘Australia is an expensive place to do business and it’s getting more expensive.’

Energy Minister Martin Ferguson says nuclear power is a proven clean energy source that will become cheaper in the future.

Australian Financial Review

The government’s Asian Century white paper, set to be released on Sunday, will focus on strategies aimed at deepening ties with Asia to secure Australia’s long-term economic and security future. It will argue that Australia needs to engage in lower-level areas such as education, the workplace and people-to-people connections, while also being more receptive to foreign investment. Trade Minister Craig Emerson, who helped write the paper, is pushing for foreign investment in northern agriculture.

Julia Gillard told the National Farmers’ Federation congress that the federal government will establish a register for foreign ownership of farmland in order to ease concerns that foreign investors are buying up Australia’s prime agricultural assets.

The Financial Review also reports on the future of uranium mining, with Australian Uranium Association chief executive Michael Angwin saying the mining of the resource could rival Australia’s massive iron and coal industries.

The Age

The Age also reports on the government’s move to establish a register of foreign-owned farms in Australia. The register will provide ‘a more comprehensive picture’ of the nature of foreign investment.

The Courier Mail

With the ban on uranium mining lifted in Queensland yesterday, Senator Barnaby Joyce has put nuclear power back on the agenda, claiming that if we are prepared to export the resource, we should be willing to use it domestically.

Resources Minister Martin Ferguson says the resources sector has become ‘fat and lazy’ and that Australia should continue expansion and investment in the face of low commodity prices.

Burke Shire Deputy Mayor Paul Poole said lifting the ban on uranium mining would ensure jobs in the state’s remote northwest, particularly as other job opportunities diminish. Chairman of the Australian Institute of Company Directors Keith DeLacy said the ban ‘achieved nothing in terms of the environment or security’ and ‘only serve to make us poorer as a state.’ No Link.

The West Australian

South African based Gold Fields announced yesterday that it would cut 170 jobs from mining operations in Western Australia by the end of the year due to rising costs.

The West Australian also covers BP Australasia’s accusations that the Federal Government is failing to address the problem of rising operating costs, making Australia uncompetitive and unconducive to foreign investment.

The Weekly Times

A report by Port Jackson Partners director Angus Taylor showed under the right leadership Australia could more than double agricultural exports by 2050, adding an extra $710 billion to Australia’s exports. Taylor said the industry must capitalise on market opportunities in Asia, which would need large amounts of capital from both domestic and foreign investment.

North Australia Digest – 23/10/12

by 23 October 2012

The Australian

Queensland Premier Campbell Newman has decided to lift the ban on uranium mining in Queensland, unlocking a huge opportunity to recommence development of the resource in the state. This comes 30 years after the state’s last mine closed and could see development worth up to $18 billion. Newman says the change was prompted by Julia Gillard’s visit to India, where she discussed uranium exports with the country.

The Commonwealth now expects its mining tax to generate only two-thirds of what they had predicted earlier in the year due to falls in commodity prices. Yesterday’s MYEFO forecast the earnings from minerals resource rent tax down 32 per cent from this year’s May budget.

Australian Financial Review

BHP Billiton Mitsubishi Alliance employees have endorse a new workplace deal at the company’s Queensland coal mines that will see annual pay rises of 5 per cent over three years, a $15,000 bonus and increased superannuation.

Former AWB managing director Gordon Davis says preventing foreign investment into GrainCorp could deter necessary flows of capital into the agricultural sector.

Treasurer Wayne Swan denies claims he announced the budget review earlier than usual in order to avoid revealing how little revenue the Mineral Resources Tax has generated.

The federal government has said Australian coal mines could see more job cuts as the industry comes under greater pressure due to steadily low commodity prices.

Trade Minister Craig Emerson is encouraging farmers to welcome foreign investment in order to take advantage of Asia’s increasing demand for Australian agricultural exports.

The Age

The Age also reports on the lifting of the uranium mining prohibition in Queensland after a 30-year ban. This follows the federal Labor Party decision to remove policy bans on uranium mines and begin discussions to sell uranium to India, as well as policy changes on uranium in Western Australia and New South Wales.

The Courier Mail

Again, the Courier Mail reports on Queensland Premier Campbell Newman’s decision to overturn the 23-year ban on uranium mining, facilitating the redevelopment of an $18 billion industry, which could also see thousands of jobs created.

A CPA Australia report found Australian business leaders are struggling to engage with Asian markets due to relatively poor knowledge of the region and its languages. The report discovered that Australia may not be able to capitalise on its geographic location if it doesn’t overcome cultural barriers, stating ‘[t]here is a strong risk that without a change in mindset from Australian businesses, Australia will be a peripheral player in the Asian century.’

The West Australian

Analysts say uranium explorers in Queensland are unlikely to begin production any time soon, despite the recent policy change to mining in the region. No Link.

The Brisbane Times

The Brisbane Times also reports that Australia’s uranium sector will be given a huge boost as Queensland Premier lifts the ban on uranium mining in the state.

The federal government announced it will introduce a foreign register for agricultural land in an attempt to ‘take the politics out of foreign ownership’.

North Australia Digest – 22/10/12

by 22 October 2012

The Australian

Deloitte Access Economics director Chris Richardson says that it may have been wise for the government to delay the release of MYEFO in order to assess the first mining tax instalments. Richardson says the slowdown in demand from China and low commodity prices will affect the mining tax, but the treasury is still applying its latest estimates of where commodity prices are going to be to pre-budget estimates of how much the new tax would raise.

On Saturday, head of iron ore miner Mount Gibson Jim Beyer said Australian miners need to return to higher levels of efficiency as the recent run of high commodity prices draw to an end.

The Australian Financial Review

GrainCorp chief executive Alison Watkins calls for less regulation and greater investment from policymakers and industry to ensure Australia can benefit from Asia’s increased demand for agricultural exports. Agricultural export is forecast to double by 2050, yet Watkins says Australia “risks losing its international competitiveness, particularly as costs across the supply chain increase.”

ANZ chief executive Mike Smith says Australian companies must look to further develop investment in India, not just China, as we prioritise an Asian growth strategy.

Over the weekend, the Financial Review reported that Climate Change Minster Greg Combet was careful not to attribute the steep drop in greenhouse emissions to the carbon tax. Instead, Combet claims the flooding of Yallourn’s coal-fired generator accounts for the reduction.

In her column, Jennifer Hewett comments on the timing of the release of MYEFO, saying that the payments to be made by mining companies BHP Billiton and Rio Tinto, the only companies making payments, won’t be anything near what the Treasury has budgeted for.

The Age

The Northern Territory is closing in on Western Australia as Australia’s top performing economy thanks to activity from a $33 billion liquefied gas project.

On the weekend The Age reported on cutbacks made across Australia’s iron ore industry as it faces low commodity prices. Mount Gibson Iron, Sinosteel Midwest and Atlas Iron were all affected by the need to increase efficiency as demand slows.

The West Australian

Deloitte Access Economics revealed in a report released today that the Australian economy could struggle in the long-range. Spending cuts from the government, falling commodity prices, and no drop in the Australian dollar mean the “outlook is tough”.

North Australia Digest – 19/10/12

by 19 October 2012

The Australian

The Australian also report on the dangers of China’s slowing economy in dragging down commodity prices, particularly iron ore.

Mount Gibson to slash 270 jobs in response to volatile market conditions in the mining sector

The Financial Review

ANZ banking group has said that Australia’s agricultural industry requires massive injections of capital in order to take advantage of Asia’s increased demand for cereal and meat exports as the region becomes wealthier. The value of farm exports has the potential to triple to $1.7 trillion by 2050.

As Julia Gillard’s trip to India comes to an end, the Australian government makes it clear that it plans to use its leadership of an Indian Ocean peak group and the G20 summit group to forge closer diplomatic partnerships with India in trade, regional security and infrastructure development. This will be particularly important as the concerns about the strength of the Chinese economy grows.

Arrow Energy is confident its proposed liquefied gas plant in Queensland will go ahead despite major challenges imposed by high costs and ‘uncompetitive investment’.

The slowing growth of China’s economy as well as the increased supply hitting the market are weighing down the price of iron ore, with HSBC forecasting the price of iron ore will average $US105 per tonne by 2013.

The Age

The Age reports on Julia Gillard’s visit to India pointing out that previous obstacles between the two countries no longer exist, agreements have been made to start negotiating safeguards for uranium exports. This will pave the way for other relationships to expand, including defence ties, energy security and other bilateral trade agreements.

The Age also reports China’s slowing economic growth. Comments from Premier Wen Jiabao point advise ‘economic growth has started to stabilise’, suggesting that growth may continue at a slower rate. As a result, commodity prices are unlikely to rise to previous levels which will effect Australia’s mineral exports.

As well as Mount Gibson’s move to slash 270 jobs, Atlas Iron and Sinosteel Midwest have also announced cutbacks.

The West Australian

The Federal Treasury has rejected statements that the mining boom is drawing to a close, pointing to signs that China’s economic slow-down is set to bounce back, with Liberal Senator Mathias Cormann saying investment would grow 45 per cent this year after a 75 per cent expansion through 2011-12.

The Courier Mail

Atlas Iron set to increase efficiency by axing up to 30 jobs while increasing shipping targets and production capacity as a result of volatile prices and high costs.

North Australia Digest – 18/10/12

by 18 October 2012

The Australian

As BHP and Rio Tinto are set to be the only two resource companies making payments to the new mining tax on Monday, BHP executive Marius Kloppers says future mining growth must be driven by improved productivity as well as decreased tax and regulatory burdens.

In a separate article, Marius Kloppers weighs in on the future of coking coal, saying Queensland’s vast resource base will not be enough to secure its own future if “[t]he heavy cost of taxes, royalties, declining productivity and a strong Australian dollar” continues. Subsequently, further investment in these operations will be far less attractive.

Julia Gillard’s visit to India focused on forging closer defence ties with the world’s biggest democracy. The ties would hopefully secure maritime routes and build further co-operation across the region, effectively safeguarding uranium export as well as other bilateral business opportunities.

The Australian Financial Review

The Financial review reports on BHP chief executive Marius Kloppers statements that the government must work together with resource enterprise to recover Australia’s levels of attractiveness to investors, saying the next round of minerals investments in Australia will only be captured if costs are decreased and productivity improved. He says the carbon tax, state royalties and overlapping regulatory processes are making large-scale project-development in Australia too costly.

Julia Gillard praised India’s shift from agriculture to a more services based economy, saying the change marks an under-appreciated opportunity for Australian companies to establish further relationships.

GVK Group vice-chairman Sanjay Reddy praised Australia’s project approval system as construction contracts for the new Abbott Point coal mine in Queensland were announced.

The number of contractors in the mining industry is falling as future business begins to dry up in the tightening resources sector.

The Age

The increasing cost of operations as a result of the carbon tax is being felt through the closure of several coal-fired stations across Australia.

The Courier Mail

The Courier Mail reports that Queensland is unlikely to get any more major mining investment until the costs of labour, taxes, royalties and the value of the Australian dollar falls.

The West Australian

The West Australian also reports on Marius Kloppers’ warning to improve overall cost efficiency and productivity in the face of rising costs and moderating commodity prices as our China-based resource cycle has hit its peak.

North Australia Digest – 17/10/12

by 17 October 2012

The Australian

Energy Australia says the carbon tax is driving up operating costs while wholesale electricity prices are weak and demand for electricity is plunging. This follows Queensland’s Stanwell Corporations decision to withdraw two coal production units at a cost of 64 jobs only two weeks ago.

Following a meeting between several senior Australian and Indian business leaders, Lindsay Fox says the government’s decision to begin negotiations on uranium export to India could improve other relationships between the two countries, presenting ‘opportunities for Australia in food production as well as resources’.

Industry experts say dairy farmers will need to step up production to meet export demands as the global hunger for Australian cheese grows, particularly from China, Australia’s fastest growing cheese export market.

Rio Tinto’s iron ore operations in northern Western Australia remain resilient in the face of higher costs and growing uncertainty in export demand from China, as well as global volatility in iron ore price.

Roy Hill general manager of external affairs Darryl Hockey says the Queensland mine project is still on track despite ‘intricate and exhaustive’ processes. The project will create 2000 operational jobs for the life of the mine, which is forecast to be over 20 years.

The Australian Financial Review

ANZ chief executive Mike Smith says Australia stands to benefit greatly from Julia Gillard’s visit to India, not only by opening the door on uranium exports, but because of the potential for Australia to supply other resources and agriculture products to India’s growing economy.

The Australian Industry Group says Australia’s focus on producing natural gas for export risks digging a massive hole in the annual GDP and sending domestic users ‘to the wall’ due to rising costs.

Treasury Secretary Martin Parkinson says that while the Australian mining boom represents the first wave of opportunity in the Asian century, the increase in demands for high-end agricultural exports also represents serious opportunity for Australia in the region as the number of middle class consumers in Asia is set to increase dramatically.

The Age

The age also reports on the potential impact of Julia Gillard’s visit to India to make an important breakthrough in the future economic relationship between the two countries.

The West Australian

The West Australian also reports on the increasing demand from Asia for high-end Australian agriculture products. However, WAFarmers president Dale Park says it may take years to overcome structural problems and inflated costs of production in Australia. No link.

The Courier Mail

The Courier Mail reports on the wave of job cuts that hit the coal industry as Ensham Resources made the decision to downsize operations in Queensland in terms of both personnel and production. Ensham Resources chief executive Peter Westerhuis says that federal and state government programs to introduce new taxes and raise existing ones will compound an already difficult situation. No link.

North Australia Project – 16/10/12

by 16 October 2012

The Australian

Julia Gillard’s arrival into New Delhi for meetings with the Indian Prime Minister could increase the hopes of  Australia selling uranium to India, thereby boosting resources and services exports to one of the world’s fast-growing economies.

Tony Abbott’s private meeting with Indonesian President reflects Indonesia’s view that Tony Abbott is likely to become Australia’s next Prime Minister. A range of issues important to the ongoing relationship between the two nations were discussed, including agricultural exports.

Analysts say the recent rebound in iron ore prices, up 32 per cent from a three year low of US$86.70 a tonne, will fall again as the burst of demand from China following the country’s Golden Week holiday is not sustainable. No link.

Managing director of DP Word Australia says that volumes in Australia’s imports and exports are not likely to see any growth over the next year, with volumes currently still lower than the previous year.

The Financial Review

The Financial Review also reports on Julia Gillard’s visit to New Dehli, with Australian India Institute director Amitabh Mattoo saying the decision to allow uranium exports to India lays the groundwork for more co-operation in other areas between the two countries.

The Australian Greens called on Julia Gillard to ditch plans to sell uranium to India because of concerns about nuclear plant safety, effectively calling for the reinstatement Australia’s ban on uranium exports to India, which was lifted in December. No link.

Major energy companies, including Shell and ConocoPhillips to go ahead with hugely expensive exploration programs off the coast of West Australia despite increasing concerns of high cost.

Federal Resources and Energy Minister Martin Ferguson says greater market transparency, increased trading opportunities and removing impediments to investment in new supply would adequately respond to calls from large energy users for intervention to secure adequate gas supplies.

The Age

Trade Minister Craig Emerson has played down the potential influence of Julia Gillard’s visit to India, saying that uranium trade negotiations may take years.

The West Australian

Chairman of Woodside and the National Australia Bank Michael Chaney says Perth’s resource-based economy has proven resilient over the last few years, despite global downturns. He also states that resources could potentially become the most important export activity in this state for decades to come.

The Courier Mail

President of The Australian Pipeline Industry Association Kevin Lester warned that environmental regulations being imposed on resource projects were becoming too onerous, that the government should stop “regulating for the sake of it”. No Link.

A new underground coal mine in Central Queensland has been given the go-ahead by the state Environment Department to prepare an environmental impact statement for the multimillion-dollar project. No Link.

North Australia Digest – 15/10/12

by 15 October 2012

Australian Financial Review

The federal government has placed boosting the quality of the education and training system at the top of the “Asian Century” white paper, due to be released at the end of the month. Business demand for labour market reform is ranked further down the list of policy priorities aimed at boosting Australia’s international competitiveness.

Macmahon Holdings chief executive Ross Carroll anticipates an increase in the stability of gold compared to other resources will be met by greater foreign investment from China and India.

GVK chairman Sanjay Reddy says confidence in Australia’s regulatory system has increased with the approval of a $6 billion Alpha mine, a joint venture between India’s GVK and Hancock Coal.

Opposition leader Tony Abbott is likely to discuss the future of Australia’s live cattle exports when he meets with Indonesian President today.

BHP Billiton is set to report decreased exports from its Queensland coking coal division in the September quarter, down 10 per cent from the June quarter, due to weaker demand.

The Australian

The Chief executive of the Australian Network of Environmental Defender’s Offices helped draft a document that planned to “disrupt and delay key projects and infrastructure” of Australian coal exports. No link.

Martu elders in Western Australia’s north signed a deal with Cameco last week to support the development of a uranium mine on land owned by indigenous people. The deal will see more jobs, training and business opportunities for the Martu, as well as housing and food benefits in the remote area.

Julia Gillard’s visit to India has the potential to consolidate on the recovering economic and strategic partnership between the two nations.

Tony Abbott says Australia’s future ties with Indonesia have potentially greater impact than other relationships; we should not assume that “distant prospects are always the most glittering”.

The West Australian

The West Australian also reports on Julia Gillard’s first prime ministerial visit to India this week to further develop a mutual interest in keeping Asia prosperous as China rises. India, our fourth biggest export market, is still recovering from a decade of tensions and bad publicity with Australia. No Link.

Toro Energy’s proposed uranium mine continues to be met with protest by anti-uranium and green groups as the site at Wiluna awaits Federal approval. The mine must also satisfy other State Government conditions, including support from the Department of Mines and Petroleum, before uranium export can begin. No Link.

The Australian Greens have requested the federal government to reassess its decision to allow uranium exports to India, as they believe a nuclear accident there is inevitable.

The Courier Mail

Mining services group Logicamms says major companies are planning to recruit temporary overseas workers to service major projects in the north of Western Australia as the cost of Australian labour increases.

North Australia Digest – 12/10/12

by 12 October 2012

We’d love to know what you think about today’s major stories that impact North Australia:

The Australian

Treasurer Wayne Swan says Australia can’t avoid the slowdown in the global economy but the national economic outlook remains strong.

Shares in mineral sands producer Iluka have been hit hard after price-cutting by arch competitor Rio Tinto and Iluka’s own strategy of maintaining supply “discipline” in an effort to bolster prices saw its sales revenue slashed by more than half in the September quarter.

Australian Financial Review

ExxonMobil’s most senior executive in Australia has warned that multibillion-dollar investments in liquefied natural gas projects are under threat because of government policy and labour laws that combine to make Australia a “very, very expensive place to do business”.

The Age

BHP Billiton and Exxon Mobil could be less than a year away from deciding how best to develop a major new gas field in Western Australia, highlighting the growing importance of oil and gas within BHP’s portfolio.

West Australian

The creation of Australia’s first national oil and gas regulator, National Offshore Petroleum Safety and Environmental Management Authority, at the start of this year, has coincided with a marked increase in exploration expenditure in WA.

Investors in Macmahon Holdings were concerned  last month upon learning the contractor would likely take a $40 million hit from another disastrous rail project. The controversy around who is to blame continues.

Iluka Resources, the world’s biggest zircon producer, said mineral sands sales plunged 58 per cent in the third quarter as it cut output on weaker demand.

Herald Sun

Energy companies have made mistakes in the rush to exploit shale and coal seam gas but the debate is now being hijacked by “emotional opinions”, the local head of US oil giant ExxonMobil says.

NT News

People queued for ages for a chance to buy a property and live in Darwin’s newest suburb. The lots – land only – were priced between $270,000 to $340,000.

Feel free to leave us a comment on any of the above stories.

 

North Australia Digest – 11/10/12

by 11 October 2012

We’d love to know what you think about today’s major stories that impact North Australia:

The Australian

Julia Gillard is set to take part in top-levels talks in New Delhi next week that could pave the way for negotiations on a treaty to open up uranium sales to India.

The chairman of the Foreign Investment Review Board says the body is trying to “dial down the tension” as proposed sales of Australian assets to Asian buyers continue to stir controversy.

A senior Royal Dutch Shell executive has done little to dampen growing speculation that the company will push its revolutionary floating liquefied natural gas (FLNG) technology as a solution to the ongoing controversy over the $US45 billion Browse project in Western Australia.

Mining contractor Calibre Group will spend more than $90 million on its seventh acquisition in two years, as the company continues to lessen its reliance on new mining construction projects.

Australian Financial Review

Fang Xing-Hai, Shanghai’s top finance official thinks Australia can be an “intermediator” between China and other countries in a range of areas. Above all, he thinks there is tremendous scope for Australian government and business to transfer knowledge to China across a range of industries.

Clough chief executive Kevin Gallagher has blamed over-ambitious tendering among engineering companies for some of the difficulties in the sector, arguing they should have taken on fewer contracts and better anticipated the slump in market ­conditions.

The federal government has heavily censored documents detailing Alcoa’s lobbying efforts to secure a $42 million taxpayer bailout of its Point Henry aluminium smelter.

Indian infrastructure conglomerate GVK will go ahead with plans to raise $6 billion in financing after receiving federal government approval for a port in Queensland.

The Greens have sought to amend government legislation linking the carbon scheme to Europe to require the Productivity Commission to immediately review assistance for coal-fired generators.

China is experiencing a spate of uneconomic iron ore production that would have been unthinkable three years ago. Its iron ore production is being curtailed by market forces such as falling prices.

West Australian

The State Government is sweating on a recovery in the property market to arrest its financial slide, after Treasurer Troy Buswell warned yesterday that volatile iron ore prices and royalty revenue meant a Budget deficit could not be ruled out.

A fresh Chinese takeover for rare earths miner Lynas Corp would likely fail, after the head of the Foreign Investment Review Board said one of its prime concerns in examining investment in Australia’s resources sector was market concentration.

Green groups have promised to fight the start of uranium mining in WA to the bitter end after Environment Minister Bill Marmion approved Toro Energy’s Wiluna project yesterday.

Herald Sun

The Australian market looks set to open lower following losses on Wall Street with investors cautious after Alcoa said China’s economic slowdown was hitting aluminum consumption and Chevron slashed its earnings outlook.

Feel free to leave us a comment on any of the above stories.