North Australia Digest – 2/11/2012

Australian Financial Review
The Gillard government has overestimated Chinese demand for coal and iron, warns economist and Labor government advisor Ross Garnaut. Furthermore, the forecasts in the Asian Century white paper ‘really duck the issue’ by having low, medium and high scenarios on commodities ‘so wide apart that it doesn’t say anything’.
Iron ore prices will drop over the longer term, according to BHP chief executive for aluminium, nickel and corporate development Alberto Calderon: ‘The physical iron ore demand of China will go down. That high end cost curve will disappear’.
The Australian
Australia’s biggest resources development, the $43 billion Gorgan LNG project in Western Australia, has struck a deal with the federal government to import 150 semi-skilled foreign workers. Australian Manufacturing Workers Union WA secretary Steve McCartney said, ‘We’d be very disappointed if Chevron are going to do a deal to get the labour without doing proper market testing, and we’d be especially disappointed if they didn’t support skills development’.
The Gillard government is investigating another potential breach of its animal welfare guidelines in Indonesia, after allegations that Australia cattle were slaughtered outside an accredited abattoir.
Horticulturists say that the goal of making Australia the food bowl of Asia is impossible whilst high production costs and extensive red tape remain. Huon Valley blueberry farmer Greg McCulloch believes his industry may be viable for only another four to five years because of competition from countries with lower labour costs, such as New Zealand and Chile. (No Link).
As part of a structural review by new chief executive Ted Pretty, Hill Holdings is set to cut jobs from its 2600 strong labour workforce in Queensland and South Australia.
The Australian also reports on Alberto Calderon’s warning that the Australian iron ore industry is in danger in the near future.
Departing chief of the Productivity Commission Gary Banks says productivity has become devalued coinage by being linked to any policy with the any economic dimension: ‘The most important thing a government can do is expose business to international competition. It was the winding down of tariffs in the 1970 and 80s that forced the least productive companies out of business’.
Stephen Bartholomeuz writes that Australia’s LNG industry is under threat as the US is preparing to export cheaper shale gas into the Asia-Pacific market: ‘At current domestic gas prices the US gas would be more than competitive with the Australian producers, even after taking into account the costs of liquefaction and transport’. (No Link).
The Age
The Age also reports of Hill Holdings plan to cut jobs from its South Australia and Queensland companies.
The West Australian
Kwinana Mill is the latest fabricator to shut down amidst lower demand and high Australian dollar. ASI state manager James England has lashed out at Government for failing to better protect the steel fabricators from off-shore competitors.
Courier Mail
Diatreme’s Clermont Copper Project in central Queensland will receive a $US8 million injection, which will result in more jobs for the region. The Brisbane based explorer announced the agreement with UK miner Antofagasta during day 2 of the Brisbane mining conferences. (No Link).