North Australia Digest – 17/12/2012

The Australian
The results of the upcoming election in Japan could have major implications for Australia’s uranium sector. The Liberal Democratic party – who, according to recent polls, are likely to take office – has been campaigning on a platform far more nuclear-friendly than its rivals, raising the hopes of many Australian uranium miners and explorers who are keen to see Japanese demand for uranium increase. The managing director of uranium explorer Deep Yellow, Greg Cochran, believes Japan’s return to nuclear energy would be the rational choice, saying the halt of nuclear output following last year’s Fukushima disaster has had an adverse environmental and economic effect on the country. However, an increase demand for uranium could give Australia’s LNG exporters more problems: Japan has dramatically increased its reliance on imported LNG, coal and oil to meet its power needs, so a reversal of nuclear policy could see the demand for these exports slow.
The oil and gas industry has welcomed changes made to the Petroleum Resource Rent Tax by the federal government. It is hoped the changes will clarify a number of issues that came to light in the recent court case between the Australian Taxation Office and ExxonMobil’s Australian division, effectively closing certain loopholes. Australian Petroleum Production and Exploration Association chief executive David Byers said the amendments would remove “a considerable degree of uncertainty” in the industry. “The commitment of Australian and global oil and gas companies to invest billions of dollars in capital has provided important support for the Australian economy,” Mr Byers said. Woodside petroleum also welcomed the decision, stating: “Providing certainty on these issues will be important to maintaining producer and investor confidence in Australia’s oil and gas sector”.
Jeff Whittle, an 82-year-old computer programmer in Melbourne, believes he has created a computer program that could solve the resource industry’s cash flow problems. Whittle believes his program, based on an algorithm that co-ordinates diverse elements such as landscape, ore grades, refining capacity and logistics, can boost the cash flow of mines by up to 100 per cent. Whittle says miners tend to focus on improving individual areas of operation to reduce production costs without considering how they affect other parts of the supply chain. “We’ll put up the cost of mining and still improve profit. Most mining engineers have minimising cost in their key performance indicators, and they do their best to keep mining constant, mining the same amount every day whether you want it or not, and that’s silly,” Whittle said.
The Australian Financial Review
According to polling done for the Minerals Council of Australia, the number of people who say they disapprove of Australia’s carbon tax has increased to 58 per cent in November, up from 43 per cent in September 2010. The Minerals Council has said the carbon tax and emissions trading scheme is “far more onerous than any other scheme in the world, including the European Union’s”. Minerals Council CEO Mitch Hooke said the scheme imposed costs on Australia’s minerals industry that none of Australia’s competitors face and that it undermined the ability of the sector to introduce the low emissions technologies needed to reduce emissions.
The coal industry says carbon capture and storage is emerging as a viable technology if it can gain more public funding to enable its operation. CCS won support of a number of green groups at the Doha climate change talks this month, with the International Energy Agency stating continued efforts to develop CCS were “critical”. Energy Minister Martin Ferguson said the development of CCS, such as at Queensland’s Callide’s project, might help Australia meet its emissions reduction targets with the least cost to the economy.
The Queensland government will implement a new resolution process to determine disputes between landholders and coal seam gas and other miners. The process, to be integrated into the Land Court, is part of a six-point plan aimed at taking the heat out of conflict between the agricultural and mining sectors. Natural Resources and Mines Minister Andrew Cripps said the original Land Access Framework had failed to properly serve both groups, stating that the government’s plan would provide “equity and certainty to both sectors”.
The Age
In its latest review of the nation’s economy, Paris-based Organisation for Economic Co-operation and Development has urged the government to consider raising the GST and widening the mining tax in an effort to improve the budget’s long-term outlook. “Tax reforms, including a lower corporate tax rate, a broader resource tax rent and more efficient state taxes would facilitate ongoing structural adjustments,” the report said. The OECD said these policies were necessary for Australia to consider to ensure the economy can benefit from Asia’s continuing industrialisation.
The West Australia
Green groups have urged authorities to increase protection for the Ningaloo Reef after US-based Apache Energy revealed plans to explore for oil just 13km from the World Heritage-listed site. This follows a number of companies becoming involved in exploration in the area, with BHP and Shell also revealing plans to explore for oil and gas off Ningaloo. World Wildlife Fund WA director Paul Gamblin said seismic activity associated with exploration was known to disrupt migration patterns of marine species such as whales and dugongs. A spokesman for Apache said they are “committed to conducting all its operations and activities with minimal impact on the environment and other marine stakeholders and in compliance with all Federal and State Laws”.
The Courier Mail
The quarterly Commonwealth Bank Future Business Index has revealed that confidence for mid-market mining companies has decreased as the resources sector faces increased competition and concerns about global demand. CBA’s executive general manager of corporate financial services Symon Brewis-Weston said miners experienced a significant decline from 17.7 to -7.2 on the index. “The drop in confidence within the mining sector appears to be somewhat delayed,” Mr Brewis-Weston said.
NT News
Gove bauxite miner Pacific Aluminium has released a 52-page notice of intent which outlines plans to build a  600km cost-cutting gas pipeline from Katherine to Gove. Parent Company Rio Tinto has said it wants to sell the Nhulunbuy alumina refinery and bauxite mine, threatening that if the pipeline doesn’t receive government funding, the refinery will close. The refinery is a major employer in the small mining town. Chief Minister Terry Mills said negotiations between the Territory and Federal Governments were progressing well.

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