The future of the world’s third largest miner was being questioned by global investors yesterday as Rio Tinto announced a $US14 billion write-down of its aluminium and coal assets. As a result of the announcement, the board felt chief executive Tom Albanese could no longer keep his position. Sam Walshe, was announced as the new chief executive after driving the spectacular growth of Rio’s Pilbara iron ore operations since 2004.
Business has attacked a Greens attempt to prevent Canberra handing over power to states in another stoush over ‘green tape’ blamed for slowing the approval process of major projects. The Business Council of Australia has warned parliament against a Greens amendment to environment law on the grounds it would stop reforms aimed at avoiding duplication between governments.
Iluka will axe 65 jobs after shutting its West Australian mining operation, as the mineral sands producer continues cost cutting measures in response to adverse market conditions.
Woodside Petroleum’s $15 billion Pluto LNG plant in Western Australia is set to become the company’s biggest single earner, after the project drove a 30 per cent surge in the group’s total output and sales. Despite Pluto’s strong start, the project’s full potential rests with an expansion that has been prevented from proceeding due to Woodside’s lack of success in shoring up enough gas.
The Australian Financial Review
Business groups have called on Prime Minister Julia Gillard to honour her pledge to cut “green tape” on major resources projects and have urged her to block Greens attempt to lock environmental protections at the state and federal level. “We are of the view that if you design the standards and bilateral agreements well, you will be maintaining the environmental integrity and in some states improving the standards but also speeding up the approval process,” acting chief executive of the Business Council of Australia Maria Tarrant said. The BCA cited a major resource project that gained approval after two years by complying with 1500 conditions – 300 federal, the rest from the state — and 8000 sub-conditions at a cost to the company of $25 million.
Iron ore’s dream run has come to an end with the spot price plunging 5 per cent to $US158.50 a tonne on Wednesday. UBS analyst Tom Price forecasts the iron ore price would trade in a range of $US130 to $US160 a tonne until May or June – the usual Asian re-stocking cycle – but with volatility throughout. “We have seen steel prices lift just in the last few weeks,” he said. “[Steel mills in China] are generally marginally profitable at this stage.” Mr Price expects Chinese steel production will rise by 3.5 per cent to 740 million tonnes this year, but that seaborne iron ore supply will grow by 6 per cent.
The West Australian
It has been revealed that State-backed China Metallurgical Geology Bureau is a major share holder in new Uranium explorer Zeus Resources. Zeus will hit the boards on Monday after successfully raising $13.5 million to jump-start its uranium exploration projects scattered around WA.
An upcoming Federal Government plan will increase the pressure on contractors to buy from Australian manufacturers. The plan is expected to add to the bottom line at a time of skyrocketing costs, which helped to blow out Chevron’s Gorgon project by $9 billion.
The Courier Mail
The use of a fly-in, fly-out workforce at Queensland mines could be restricted by the state government in an attempt to encourage families to move away from major centres. In a visit to Mt Isa, Queensland Premier Campbell Newman said FIFO was appropriate in remote mines but may not be necessary in projects close to cities. “This Government believes in regional cities and towns like Mount Isa and we want to see regional Queensland built up. We don’t want everyone to live in southeast Queensland.
So what we have to do is take it on a case-by-case basis. If there are new mines to be built in driving distance from Mount Isa, preferably we will see the families coming here and people relocating here,” he said.