North Australia Digest – 19/09/1219 September 2012
Here is a digest of today’s major stories that impact North Australia:
New Coal projects will be shelved across Queensland as a result of increased royalties on coal announced in last week’s state budget. Robert Neale, managing director of New Hope Corporation, said “Where it does have an impact is the cumulative burden of that plus the MRRT and the carbon tax on new projects. That burden is such that I would think the current climate the majority of development projects in Queensland are likely to be delayed to varying extents.”
Resources Minister Martin Ferguson has blasted union and mining company executives for complacency over the mining boom. “Industry itself has got to front up to better managing some of these projects. In terms of construction projects, management has become sloppy,” he said. Mr Ferguson also challenged union leaders to adjust their claims given that iron ore was down from $190 to $100 a tonne, coking coal was down from $320 to $160 a tonne and thermal coal was down from $220 a tonne to a range of $70 to $90 a tonne.
The falling queue of ships waiting to collect raw materials from our ports is a clear indication of falling demand in the resources sector. Three years ago, there were queues of more than 300 ships waiting off Australia’s major ports to load up with iron ore and coal, yesterday there was only 90. The figures show that Asian and European ships are increasingly going else where for their raw materials, mainly the US.
Bureau of Resource and Energy Economics executive director, Quentin Grafton, said yesterday prices for Australia’s key iron ore and coal exports will bounce back over coming months as China’s steel mills come back into the market. Dr Grafton said the price fall reflected short-term cyclical factors rather than any change in the long-term outlook for our export commodities.
In a submission to a federal parliamentary committee examining the proposed Protecting Local Jobs Bill, the Construction Forestry Mining and Energy Union has called for local workers “to have a legislated preference in redundancy situations over overseas workers” as part of the regulation of Enterprise Migration Agreements.
Immigration Minister Chris Bowen has rejected a union push to abandon the use of foreign labour in large mining projects as the resources industry slows. “A lot of work went in to making sure that Australians get the opportunity for those jobs but that there is appropriate provisioning for certainty for these very, very large projects to be able to proceed in the knowledge that they can get the workers necessary if they’re not able to source the labour in Australia,” Mr Bowen said.
The Financial Review
Australia will have to fight to secure a next round of liquefied natural gas projects, Resources Minister Martin Ferguson has warned. “We have got a lot of major LNG projects that we are going to have to fight to get,” Mr Ferguson told a resources conference yesterday, “It will not be easy.” Woodside’s executive director for corporate and commercial, Rob Cole, said “We must not take future growth in Australian oil and gas for granted. Australia’s LNG growth is occurring within an increasingly competitive global gas market, with more choice than ever for customers and investors. We can’t afford to be too sanguine about challenges such as rising costs and skilled labour constraints which, if not addressed, may compromise future success.”
Australia should prepare for lower growth over the long term from its major trading partner, as China goes through a period of structural change according to a senior official at China’s central bank. Speaking to economist in Shanghai last week, Sheng Songcheng played down the need for another stimulus package. After the briefing some economists have revised down their 2013 forecasts.
Rio Tinto Australia managing director David Peever has called on the Gillard government to hold an urgent review of Australia’s loss of competitiveness. Speaking at the Bureau of Resources and Energy Economics conference in Canberra yesterday, Mr Peever outlined a six point plan to make Australia more attractive. Companies needed to get skilled labour, the industrial system needed to be improved, regulations and approvals need to be simplified, there should be a focus on innovation, infrastructure needed to match capacity and a tax regime that didn’t punish the sector, he said.
The West Australian
Australia’s live sheep trade is at crisis point as the Federal Government delayed issuing shipping permits amid animal health concerns. Approximately 200,000 sheep have been left stranded on WA farms and feed lots as exporters and Australian diplomats work to clarify trade agreements with importers in the Middle East.
About half of Australia’s non-bulk commodities mines will be exhausted between seven and 18 years based on current reserves and resources, according to a university of WA paper. This short time frame sends a clear message that governments at all levels must put more resources into Greenfield exploration in order to find the mines of tomorrow, argues Simon Bennison. (No link)
The value of rural exports in 2012-13 is expected to be about $38.9 billion, one per cent lower than a year earlier. The Australian Bureau of Agricultural and Resource Economics and Sciences said the result would still be 21 per cent higher than the most recent five-year average. ABARES executive director Paul Morris, said “this is largely reflected by continued demand growth in the Asian region and markedly higher export prices for grains and oilseeds,” he said in a statement.