The Australian Financial Review
The Australian economy is not becoming more productive and will fall off a “growth cliff” when resources investment runs out according to Michael Chaney, Chairman of National Australia Bank and Woodside Petroleum. Economic growth is likely to slow to less than 2.5 per cent after 2015 because of burdens on business, including overlapping state and federal environmental regulations, and Labor’s industrial relations system, which makes the work place less flexible, he said.
PwC modelling has found the Minerals Resources Rent Tax is unlikely to be paid at all until the iron ore price rebounds to around $US 140 a tonne, partly due to offsets from state royalty payments.
Liquefied Natural Gas investment in Australia is likely to “dry up” by 2017 unless the country becomes cost competitive, according to Santos chief executive David Knox. “The challenge today is for Australian LNG to remain cost competitive so that new projects are sanctioned to meet both Asian and domestic demand. Without these additional projects going ahead, new investment in Australia’s LNG industry will dry up in 2017,” Mr Knox warned.
Increasing cost blowouts at Australia’s major resources projects could dent future investment according to Resources Minister Martin Ferguson. Mr Ferguson said that both business and government had a role to play in reducing cost, “The opportunities are there but all of us – the government reducing regulatory overburden, companies better managing their projects, construction companies having regard for project management and the union movement – we’ve all got to accept we’ve got to pull our weight.”
Fresh legal action has been launched to stop Woodside Petroleum’s $35 billion gas hub project at James Price Point. The WA Supreme Court has been asked to overturn the state government’s second attempt at compulsory acquisition of the site and rule the $1.5 billion compensation negotiated with the Kimberley Land Council invalid.
The mining boom is propelling aboriginal prosperity and creating a burgeoning indigenous middle class, according to indigenous academic Marcia Langton. The mining sector had created a model of engagement that could possibly be expanded across other industries, Professor Langton said.
The Sydney Morning Herald
Australia’s coal seam gas industry could face future carbon tax liabilities of up to $4 billion a year if “fugitive” emissions of methane from unconventional gas production turn out to be substantially higher than expected. Recent US studies indicate that emissions from coal seam could be much higher than previously estimated.
The West Australian
Construction is set to start on a $20 million abattoir in the Kimberley. An arrangement to supply free range beef to Singapore will make up 50 per cent of supply. The abattoir will help the Kimberley cattle industry clear a glut of heavier cattle, which have been unsuitable for export since Indonesia introduced weight restrictions in 2010.
Protesters in favour of the live export industry have clashed with those opposed in fiery exchanges in Fremantle over the weekend.
Nervous live cattle exporters have warned the proposed Livingston abattoir could encourage green groups to shut down the trade. Some live cattle producers are worried the abattoir will only pay around $1 a kilo for beef, far below the cost of production.
The Courier Mail
Australia needs to reduce project costs in the resources industry to keep attracting investment as the cushion provided by inflated commodity prices diminishes, Resources Minister Martin Ferguson has warned. “When you’ve got very high iron-ore or coal prices, well, you can afford to have a bit of fat in the system, a few over-runs. But the world has completely changed,” Mr Ferguson said.
The Australian Financial Review