Here is a digest of today’s major stories that impact North Australia:
The Australian
Modelling released by the Minerals Council of Australia has warned that labour costs in the mining industry are among the highest in the world. The modelling warns that high costs threaten to stall major resources projects and consequently shrink the economy by 5 per cent unless Australia commits to policies to regain its competitiveness including loosening restrictive rules on Enterprise Migration Agreements. The report also calls for measure to stop wage cost super-inflation by using skilled immigration and redirecting workers from manufacturing jobs in the eastern states to minerals jobs in West Australia.
House prices in Karratha are falling, according to a local real estate agent.
The Industrial and Commercial Bank of China is scaling back its lending to the Australia resources sector due to fears the boom is coming to an end. The head of the Bank’s local operations has revealed the bank is instead interested in increasing investment in Australia’s agricultural sector.
The Australian Financial Review
The AFR has in-depth coverage of a Port Jackson Partners report commissioned by the Minerals Council of Australia. The report says an explosion in costs is jeopardising Australia’s standing as a viable coal, iron ore and base metals producer, putting at risk $121 billion a year in resources revenue over the next two decades. High wages and productivity declines mean Australia has lost its competitive advantage over emerging miners in Africa, Asia and South America. Alan Mitchell writes that the windfall of the Chinese-driven mining boom has made Australians complacent when it comes to extracting the most from the economy, including the mining sector. The AFR’s editorial argues that Australia’s resource industry has lost its competitive first-mover advantage at the same time as the commodity price cycle has peaked, “leaving us exposed to lower cost rivals eyeing our major export markets.”
Waratah Coal’s Nui Harris says “If governments would only get down and support business and let them develop mines, the flow-on effect is that the governments will get their revenues- it’s that simple”. The calls come as miners are facing difficulties from all angles, including low commodity prices, a shortage of skilled labour and an increasingly unpredictable tax environment.
The Courier Mail
A truce between mining company BMA and coal mining unions is in tatters after CFMEU walked away from negotiations.
The Queensland government is calling for any interested parties in a bauxite mine in Aurukun, Cape York, after Chinese miner Chalco walked away from the land in 2011. On a visit to Cairns, Queensland Premier Campbell Newman said the “only condition attached to that process…is that the successful party will be the one that can show the most benefit for the Aurukun community.”
The West Australian
The single wheat desk is facing increasing pressure in Western Australia. Many WA growers want the interim wheat regulatory body, Wheat Exports Australia, scrapped as it is currently resulting in a 22 cent-a-tonne levy.
The Age
A combination of factors will restrict a substantial rebound in the Chinese economy according to Rio Tinto chief executive Tom Albanese. According to Mr Albanese China is suffering from a major slowdown in its primary export market, Europe, while also dealing with “structural imbalances… and inflation” caused by the 2008 stimulus package.
Head of HSBC Helen Wong has said that the slowdown in the Chinese economy is cyclical, and that recent moves by the government should continue to promote growth, all be it at a slower rate. Major infrastructure plans as well as lower taxes for small businesses will lead to growth in the long term, Ms Wong has also projected a bounce back in the fourth quarter.