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after the letters from the Department of Indigenous Affairs warning of significant Aboriginal sites in the area were withdrawn at the request of the company.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.