The Bolt Report’s editorial on Mrs Gina Rinehart

by 12 September 2012

Check out this segment from the Bolt Report on Sunday…

North Australia Digest – 12/9/12

by 12 September 2012

The Australian

The decision by the conservative government in Queensland to increase mining royalties is likely to undermine the Gillard government’s efforts to return the budget to surplus. Finance Minister Penny Wong accused the Newman government of acting out of political interest to ‘pick a fight’ with Canberra.

The managing director and chairman of the Australian Agricultural Company, the biggest owners of land and cattle in Australia, have called for an end to political squabbling over foreign ownership of farm land. David Farley and Donald McGauchie said it was not important who owned agricultural assets but that they were developed quickly and to their full potential. The two men called for all pastoral leases in northern Australia to be converted to freehold or private land tenure to attract foreign rural development capital. More than 40 per cent of the nation and most expansive outback rural properties – including most of northern Australia – are at present designated as state controlled leasehold land, which is leased back to farmers.

Australia’s winter grain crop is forecast to be slashed by one-fifth on the back of a dramatic plunge in expected wheat production. This is due to a fall in West Australian production, where areas have received very low rainfall.

The move by the Queensland government to increase mining royalties has contributed to a perfect storm, according to Australian miners. The hike, announced in yesterday’s budget, has led to a chorus of complaints from an industry already suffering from a slowdown in China and plunging commodity prices. Some miners have warned of further job cuts, project deferrals and investment moving offshore as a result.

The Japanese-backed Oakjee project  is facing a ‘slow death’ in its current form. The $6 billion port and rail project, along with the mine designed to support the infrastructure, is not seen as feasible given falling iron ore prices.

Business confidence slumped last month on the back of continued talk that the mining boom was over. Confidence went down despite lower interest rates bolstering trading conditions.

The Australian Financial Review

BHP, Rio Tinto and other major miners are reconsidering their investments in Queensland after the Queensland governments decision to increase coal royalties. Clive Palmer has said the decision would ‘kill’ the state’s economy.

The head of the Australian arm of one of China’s largest state-owned banks has expressed concern that the issue of foreign ownership has become too emotive in Australia. Rural Liberal and Nationals MPs want greater scrutiny of tax breaks for foreign investors.

Cost control has become a top priority for smaller coalminers as they struggle to raise money to develop new mines and governments lift royalties.

The West Australian

West Australian farmers have been hit by the double blow of below average rain fall and the decision of the Federal Liberal Party to block deregulation of wheat exports. The move has angered farmers who believed deregulation could have freed up access to ports and cut the 22 cent-a-tonne levy that Canberra imposes on growers to fund the regulatory agency.

Women’s refuges have reported a surge in demand from abused partners of men who are fly-in, fly-out workers. Relationship problems are usually caused by the lifestyle changes for families, coupled with unusual working patterns.

Sydney Morning Herald

In this opinion piece, Jeremy Warner questions whether the time is up for the Australian resources boom. Warner argues the blessings of nature, rather than the brilliance of policymakers, offer an explanation as  to why Australia has done so well.

The Courier Mail

Queensland’s resources boom still has years to run according to major industry figures. APPEA CEO David Byers argued that an extra 7000 people had been employed in the Queensland gas industry in the first half of this year, bringing the workforce to more than 18,500.

North Australia Digest – 11/9/12

by 11 September 2012

Here is a digest of today’s major stories that impact North Australia:

Australian Financial Review

The Queensland government is set to raise royalties on coal production in Tuesday’s state budget today, despite tough market conditions that have caused more than 2000 job losses in the Bowen Basin since May and threaten the viability of growth projects.

Matthew Stevens writes in the AFR that ‘…despite warnings from a host of the world’s most powerful miners that an increase would only speed the drift to marginality of the state’s mature coal projects…[and undermine] potential for new investment,’ the Queensland government is set to raise royalties.

Trade data indicates China’s economy may be heading to its weakest growth rate since 1990, sapping demand for iron ore, coal and other important Australian products.

The Newman government is moving to boost its share of skilled migrants coming to Australia with a review of requirements that have forced workers to choose other states.

The Australian

High costs and sliding prices have caused more than 3500 mining job losses in the past six months, with a worsening outlook for coking coal threatening to bring more cuts to the sector.

The Age

Australia’s coal industry continues to shed workers, with more than 2000 jobs lost this year as thermal and metallurgical coal prices slide, costs rise and Chinese demand softens.

China’s exports grew more slowly than expected in August and it imported fewer goods, triggering fresh fears that Australia’s most important trading partner is struggling to control the speed of an economic slowdown.

There is media speculation that Fortescue Metals and the Roy Hill iron ore project might do a deal to share infrastructure, rather than construct separate rail lines. This could save both companies more than $1 billion, industry sources say.

Courier Mail

Mining taxes will be ramped up in today’s QLD State Budget, setting the Newman Government on a collision course with coalminers and the Commonwealth.

BHP Billiton is shoring itself up against a rapid deterioration in its coal business, with prices halving in a year and no end to the downcast conditions in sight.

North Australia Digest – 10/9/12

by 10 September 2012

Here is a digest of today’s major stories that impact North Australia:

Financial Review

In an indication that the nation’s resource sector still has something to offer, Queensland Investment Corporation is considering establishing an international resources fund. Chief executive QIC, one of Australia’s largest asset managers, Damien Frawley said, “What is happening at the moment is a correction, it’s just a readjustment. I think it’s still got a lot of life left in it.”

Atlas Iron is looking to defy the pressure facing the iron ore sector and complete a $680 million expansion of its Pilbara operations.

In further good news for the resources sector, China has given the strongest indication yet that it will ramp up infrastructure investment to stabilise its slowing economy. Last week China approved about $US150 million worth of rail, road and port projects, which it aims to complete in three to eight years.

The price Australian companies will receive for iron ore and coking coal will largely depend on measures new leadership in Beijing can implement to lift the growth of China’s economy.

The Australian

The Asian Century White Paper, due within in weeks, is aiming to confront fears over Chinese investment. The plan will set out investment policies to tighten links with key neighbours including China, India and Indonesia.

With iron ore prices falling rapidly, a new wave of consolidation among Pilbara based operators is seen as a solution to shrinking margins, reducing the need to build railway and port infrastructure.

The worst drought in 60 years in the United States is likely to send beef prices soaring, after a dramatic cull this year. The national herd is though to be the smallest since the great depression.

The current slowdown in China is cyclical rather than a permanent easing, according to HSBC chief economist for Australia and New Zealand Paul Bloxham. Australia’s economy is an enviable position being linked to the Chinese economy, he argues, with growth rates in the country expected to lift to 9-9.5 per cent in 2014 and 2015.

Businessman Geoffrey Cousins yesterday slammed dealings between Woodside and the West Australian government as ‘corrupt’. The calls came in response to the development of the James Price Point liquefied natural gas hub, after the letters from the Department of Indigenous Affairs warning of significant Aboriginal sites in the area were withdrawn at the request of the company.

US coal giant Peabody Energy has slashed its Australian growth plans by more than half, shelving or deferring three expansions in New South Wales and Queensland. The move comes in response to uncertainty in China, the US and Europe.

With over 5000 job vacancies in the sector and more than $180 billion of projects under way or planned, the head of West Australia’s powerful resources lobby group has rubbished claims that the mining boom is dead.

The West Australian

West Australian’s have given up on the mining boom according to a September quarter survey released today. The WA Chamber of Commerce and Curtain Business School survey found that consumer confidence has plummeted to its lowest level since the global financial crisis hit. Just 18 per cent of people quizzed expected economic conditions to improve over the next 18 months.

New economic research from Barclays Bank has found that tumbling prices in iron ore could cut the nation’s company profit take by almost $17 billion. The fall could cost Australia more than $15 billion in export revenues, putting a $3 billion whole in the Federal Budget.

Two drilling rigs at the site of the proposed James Price Point gas hub have been shut down this morning due to protests by Broome residents. The protests came in reaction to allegations that Woodside had actively sought to silence information around the heritage values of the site.

WA doctors are calling  for the release the Federal Government’s report into fly-in fly-out workers. The doctors claim the mining boom will be over before health concerns are properly addressed.

The Courier Mail

With the Chinese economy slowing, the expectation that India will fill the gap is unfounded. Tim Hughes argues that the Indian economy, although strong, is unlikely to fill the possible drop in demand for Australian resources. (No link)

The Northern Territory News

Reports Nhulunbuy’s bauxite mine may be on the verge of closing have been dismissed as ‘alarmist’. The alumina operation employs 1500 workers and the towns 3800 people rely on the mine, indirectly or directly, for income. However, MLA Lynne Walker said, “I don’t believe for one minute that it will happen.”

The Age

Doubt has been cast over Australian miners near-term rebound, as senior Chinese government policy advisors have said Beijing is unlikely to have the appetite for a new round of massive spending similar to that of 2009.

North Australia Digest – 6/9/12

by 6 September 2012

Here is a digest of today’s major stories that impact North Australia:

Australian Financial Review

Fortescue Metals Group is under increasing pressure to raise equity to shore up its balance sheet, despite its decision to delay part of its $US9 billion expansion project to conserve cash.

Falling iron ore prices may prompt the Reserve Bank of Australia to bring forward interest rate cuts if commodity prices fail to recover.

Australian iron ore exporters are facing increasing pressure to sell their product at discounted rates, with Fortescue Metals Group now believed to be sending shipments to customers in China without guaranteed payment.

Resources Minister Martin Ferguson backed Gina Rinehart’s statements about high operating costs in the Australian mining industry as Prime Minister Julia Gillard mocked the heiress’s wish for cheap labour.

A contraction in the mining industry, triggered by lower commodity prices, and tighter household spending more than halved economic growth last quarter, and Treasurer Wayne Swan admits it is becoming harder to deliver a budget surplus.

Australia has a strong regime for regulating foreign investment but failure to explain this could undermine community support and risk future investment flows, former Treasury secretary Ken Henry says.

Federal cabinet’s leading advocate of liberal foreign investment policy, Trade Minister Craig Emerson, has used his involvement in an international forum on the threat of global food crisis to call for the rejection of a Nationals party-led campaign to keep Australian food production in Australian hands.

The federal opposition is considering Gina Rinehart’s push for a special economic zone in Australia’s north.

Treasury Secretary Martin Parkinson has weighed into the heated political debate about Chinese purchases in Australia, warning the country would have much lower living standards without foreign investment.

The Australian

The latest dramatic shift in Labor policy – involving billions of dollars, long-term investment decisions and impacts on the daily lives of workers – highlights the thread of uncertainty that has run through the Rudd and Gillard governments: sovereign risk.

Industrial disputes have undercut the nation’s economic performance as other countries leap ahead of Australia on a global competitiveness survey that is used to guide business investment.

The government’s Asian Century white paper looks like arriving too late. Asia’s skyrocketing growth, on which it is premised, is fading as the government’s document, originally due for release mid-year, is prepared for cabinet.

Mining billionaire Gina Rinehart’s bold plan for northern Australia to become a special economic zone with tax and red-tape exemptions has failed to win support from Labor or the Coalition.

The latest survey of the nation’s leading law firms shows they believe the resources boom is past its peak.

Investors have lost faith in predictions of a rebound in iron ore prices and bullish outlook on another decade or two of Chinese steel growth, wiping $4 billion from the value of local iron ore stocks yesterday.

Treasury secretary Martin Parkinson and his predecessor Ken Henry have criticised  “populist” objections to foreign investment as the Greens yesterday lined up with Nationals senator Barnaby Joyce to oppose the sale of Cubbie Station to a Chinese company.

Herald Sun

Terry McCrann defends Gina Rineheart: ‘Gina Rinehart did NOT call for Australian wages to be cut to $2-a-day African levels.’

The Age

Fortescue Metals has had to reassure a range of international banks about its stretched financial position after plunging iron ore prices forced it to cut its expansion plans and sell assets to reduce its high levels of debt.

The slight fall in the overall sharemarket yesterday masks a severe downturn that is taking place in the construction, engineering and mining services sector.

Barnaby Joyce last night resisted strong pressure from Opposition Leader Tony Abbott to back off his public attacks on the sale of Cubbie Station to the Chinese, as the Nationals prepare for a crisis meeting on the issue, which is deeply dividing the Coalition.

Sydney Morning Herald

Treasurer Wayne Swan has leapt on Coalition division over the sale of the huge cotton-producing Cubbie Station to Chinese investors, as Nationals Senate leader Barnaby Joyce condemned it as against Australia’s national interest.

NT News

The Greens have backed Nationals senator Barnaby Joyce on opposing the sale of Cubbie Station to foreign owners.

North Australia Digest – 5/9/12

by 5 September 2012

Here is a digest of today’s major stories that impact North Australia:

The Age

In another blow to the Australian resources sector, Fortescue Metals has dramatically scaled back multibillion dollar expansion plans and cut several hundred jobs. The move has promoted fears other miners could follow suit if Chinese demand for iron ore fails to pick up and comes just weeks after BHP shelved $30 billion worth of projects, including the massive Olympic Dam expansion and its outer harbour expansion at Port Hedland.

Elizabeth Knight points out that as one of the great mining optimists, the move by Fortescue Metals is a sure sign that the mining booms has been derailed. Because of its particular financial situation Fortescue has had to undertake a radical response. However, if commodity prices do not improve other miners will also have to rethink projects.

The Australian

Julia Gillard has further inflamed tensions with the resources sector, using a speech to a major mining conference in Perth yesterday to promote her school funding program, rather than addressing mounting concerns about rising taxes and high costs in a climate of falling commodity prices.

Sharp falls in iron ore and coal prices have shaken the Reserve Bank’s confidence in China. Glenn Stevens’ statement yesterday added to concerns that Asia is being swept into a global downturn, however the bank kept its cash rate steady 3.5 per cent.

Indigenous miners are the unintended victims of the resources pull back. Fortescue Metals yesterday flagged 1000 job cuts as a result of the fall in iron ore prices, however, the miner also confirmed that it would not be able to fulfil its commitment to award $1 billion in contracts to Aboriginal businesses.

Former Queensland treasurer Keith DeLacy has declared he would be surprised if the government got a “single red cent” from the mining tax this year as plummeting commodity prices and soaring costs squeeze the profits out of iron ore and coal projects.

Peter Van Onselen describes the Prime Minister’s speech to the Mining and Exploration conference yesterday as a “classic case of not understanding one’s audience”. In a bizarre move, the PM’s 20-minute speech, opening the conference, hardly made mention of the resources sector, instead concentrating on education.

Reports from China’s biggest steelmaking province say the industry is in “extreme depression”. The Hebei Province is unlikely to recover for some time as steel mills undergo a long-awaited restructure.

The Australian Financial Review

The Reserve Bank is considering cutting interests rates because of concern about falling commodity prices, the deteriorating outlook for the global economy and conditions in China.

BHP Billiton chief executive Marius Kloppers has expressed “categorical” confidence the iron ore price will rebound from current lows by the end of the year. Mr Kloppers said Chinese spending on fixed assets would bounce back up, leading that nation’s steel mill to restock raw materials in the near term.

The West Australian

The ripple from BHP Billiton’s decision to shelve more than $20billion of Pilbara expansion projects has become a wave, with one of the mining company’s engineering contractors moving to slash 500 jobs.

The lead Aboriginal organisation in talks with the State government over the proposed $40 billion gas hub at James Price Point has appeared against the Environmental Protection Authority’s approval of the project. The Kimberley Land Council said the EPA’s report was “virtually silent” on the project’s social and cultural effects and traditional owners could be forced to withdraw their support.

The Courier Mail

The Prime Minister has said that Australia will not compete with Africa on mining wage rates, but has other advantages to encourage investment.

North Australia Digest – 4/9/12

by 4 September 2012

Here is a digest of today’s major stories that impact North Australia:

The Australian Financial Review

A plunge in the prices of Australia’s export commodities as well as high labour and construction costs will stall $100 billion of mining and energy projects, as companies ­scramble to reassess their long-term investment pipelines.

BHP Billiton has not asked the South Australian government for an extension on the agreement covering royalties for the $US20 billion-plus Olympic Dam expansion, amid expectations it could take years for the miner to finalise a viable new development plan.

The Australian

Engineering contractors are continuing to fill their order books on the strength of the committed expansion plans of the Pilbara iron ore producers despite the free fall in prices since April.

BHP Billiton chief executive Marius Kloppers presented a bleak outlook for an expanded Olympic Dam mine ever operating in South Australia.

The Age

Miners are spending less searching for minerals for the first time since the global financial crisis. The ABS yesterday said spending on exploration in the June quarter fell by $53 million to $1.02 billion after hitting a record high in March.

Herald Sun

BHP Billiton chief Marius Kloppers has declared the group will “work with undiminished vigour” to extend Olympic Dam despite spiking its colossal expansion plan.

Courier Mail

BHP Billiton chief executive Marius Kloppers has reassured South Australians the company is not walking away from the Olympic Dam mine project.

Darwin house prices second highest in Australia

by 29 July 2012

If something isn’t done to bring housing prices down in Northern Australia, the region will never be able to reach its full potential.


National Food Plan lacks vision for northern agriculture

by 27 July 2012

The National Food Plan green paper released last Tuesday shows that the federal government is completely lacking in vision when it comes to Northern Australia. Released earlier this month, the paper again ignored any possibility of developing the region’s agricultural potential, which could feed a growing Asian population to our north. (more…)

When will North-West Australia have a permanent naval base?

by 30 June 2012

Australia’s North West Coast continues to be left devoid of any permanent naval bases despite being home to so much of the nation’s natural wealth.