North Australia Digest – 14/01/2013

The Australian
A recent surge in iron ore prices has not been enough to lift profits beyond levels needed to trigger the mining tax, meaning that for the second straight quarter revenue from the controversial impost will remain at zero. BHP Biliton, Rio Tinto, Xstrata and Fortescue Metals have all confirmed they will make no payment when due next week. The developments are likely to renew the political fight over the design of the tax and raise new doubts over Labor’s budget plans.
A Deloitte report commissioned by US LNG proponent Cheniere Energy has found Australia will be the biggest loser among LNG exporters if US production takes off in a meaningful way. The report found that Australia will have more exports displaced than any other nation because of the high costs of building new projects. The report also found that US exports, which are being made economic by a shale gas glut, would bring down international LNG prices.
Houston-based engineering contractor KBR, a design contractor studying Woodside Peroleum’s Browse LNG project, has recommended the project be built using floating LNG technology due to the high costs of building onshore in Australia. Woodside and its partners are required by state and federal governments to evaluate whether an onshore plant is viable before looking at any other options. But a recent move by Shell, which is building the world’s first floating LNG project, to increase its stake in Browse has boosted the likelihood of the offshore fields being developed through the new technology.
The Australian Financial Review
A rise in iron ore prices could deliver a $1.3 billion boost in revenue for the West Australian government, allowing the state to repay its bulging debt and record a budget surplus. Iron ore royalties account for about 20 per cent of government revenue and are set to rise on the back of an 80 per cent increase in the commodity’s price since plunging to a low of $US86.70 in September last year.
Record iron ore shipments from Port Hedland are set to boost production figures among Australia’s major mining companies when December-quarter production figures are released this week. Rio Tinto is expected to reveal whether it has met its full-year production targets on Tuesday.
A new privately-owned power station proposed for Darwin could help overhaul Northern Territory’s electricity supply sector. It is understood the $150 million project, led by three Brisbane-based businessmen, could be ready to start by 2015. The power station could increase competition in the region, with the territory having only two producers of gas for the domestic market.
Federal Labor MP Andrew Leigh says a budget surplus is still possible given rising commodity prices. “It’s certainly possible”, Mr Leigh told Sky News on Monday morning. “The Treasurer last year didn’t rule out a surplus, he said one was looking unlikely given what’s happened to revenue.”
The Northern Territory News
Northern Territory school leavers are more likely to earn high salaries in the trades than ever before, according to Hays Recruitment regional director Simon Winfield. “The opportunities to make good money are far greater than they were in the past,” he said. Unions NT’s Michael Haire said “Some electricians on site at Inpex would be grossing over $150,000 a year. It doesn’t matter whether they’re out first year or five years on.”
Talks between the NT government and Rio Tinto aimed at saving the Gove Bauxite mine are expected to be completed by the end of January, according to Chief Minister Terry Mills. The government is in talks with ENI and Santos to supply gas to the mine. Rio says the mines refinery which employees 800 workers will be closed if the negotiations fail.