North Australia Digest – 25/9/12

Financial Review
China’s giant sovereign wealth fund, China  Investment Corp, has a $US 190 billion war chest, with a view to secure the country’s long-term food supplies.  Currently a litre of milk in Beijing sells for about $7 a litre compared with $1 here.
Any Chinese attempt to buy a large stake in Australia’s dairy industry would need approval from the Foreign Investment Review Board and would have to focus on sustaining jobs, according to Treasurer Wayne Swan. Swan said he welcomed foreign investment in the country “because it creates jobs. If there were any proposal that were to come to us about investment in dairy or anywhere else, what the government does is apply our national interest test.”
Australia’s “defensive and suspicious approach” to foreign investment is putting at risk much needed investment from China, ANZ chief executive Mike Smith has warned.
In this opinion piece, Adam Courtenay says the mining boom has been sold short by many in the media, arguing  it still has some way to go. Courtenay points out that spot iron-ore prices are not everything, particularly as a lot of iron-ore shipments have been sold forward at a higher price.
The Australian
Business leaders have warned that Australia has failed to understand or embrace the Asian region, particularly our biggest trading partner China.  In a roundtable forum hosted by the Australian Institute of Company Directors, directors of blue-chip companies including BlueScope Steel, QBE Insurance Group, Perpetual, Westfield, Suncorp and Toll Holdings said there was a huge cultural gap that needed bridging if the nation was to benefit fully from the rise of Asia.
The Gillard government’s proposed business tax changes could make Australian oil and gas producers the least competitive in the world, industry groups have said. The warning have come in response to proposed tax changes which industry says could stall the massive projected growth in the oil and gas sector in Australia.
Key drivers of investment in the in resources sector are no longer supporting commodity markets making investment the most difficult it has been in the last 10 years, HSBC’s mining head has warned. Simon Francis, HSBC’s regional head of metals and mining research, Asia Pacific, said commodities markets had entered a period of slower yet more sustainable demand growth.
North Australia’s coast could be patrolled by unmanned drones under a Coalition defence strategy to be announced by Tony Abbott in an address to the Returned Services League (RSL) Congress in Sydney today.
The West Australian
Woodside Petroleum managing director Peter Coleman has said rising costs in the Pilbara are set to rise higher as new projects increase demand for labour. “Today is probably a period of time when the cost versus (LNG) price element, the margin is as skinny as it has ever been, or at least for a long period of time, for new projects,” he says.