Although the mining tax will not raise any revenue, Australia’s junior iron ore sector will still have spent millions of dollars in compliance costs just to confirm they do not have to pay. Atlas Iron managing director Ken Brisden said they had already spent roughly $2 million only to find out they will not have to make any payments for the new tax.
BHP Chief Executive Marius Kloppers told shareholders yesterday that the future of mining will depend more on production costs and volume than commodity prices.
Whitehaven Coal’s Sunnyside mine has been ‘suspended indefinitely’ due to weak market conditions. Managing director Tony Haggarty said although Whitehaven is a low-cost operator, it is not immune from low global commodity prices.
Following the Queensland government’s decision to overturn the ban on uranium mining in the state, Goldsearch announced it will conduct a review into the potential for mining the resource at its Elaine prospect in Queensland.
Australian Financial Review
Senior Treasury and Finance officials say the government was told four months ago that the minerals resource rent tax wouldn’t raise any revenue in the first quarter, and possibly the rest of the year.
Peobody Energy chairman and chief executive Greg Boyce warned the Queensland government that increased royalties were counter-productive to the industry and would lead to lower coal volumes produced in the state. Tony Boyd also writes about Boyce’s warning in his column.
BHP chief executive Marius Kloppers says that governments must provide ‘stable, predictable policy regimes in our key operating jurisdictions that support our own efforts to reduce costs.’ Kloppers says this is necessary to provide a competitive structure within which investment is encouraged, not hindered.
An annual index of Australia’s engagement with Asia shows our relationship with China has risen sharply in the past year. Australian investment in China rose by 278 per cent compared to a 51 per cent fall in Chinese investment in Australia. PwC Partner Tim Cox says this demonstrates Australia’s commitment to Asia beyond exports.
Newcrest Mining chief executive Greg Robinson says the company is looking into offshore growth due to the high Australian dollar. Robinson told reporters that costs were ‘killing competitiveness’ in Australia.
A report to be released on Sunday will determine whether the West Australian government will allow a Chinese company to buy 15,000 hectares of irrigation land in the north of the state. The opportunities for Chinese capital to facilitate expansion in Northern Australia’s agricultural industry will be highlighted.
APA Group chairman Len Bleasel has accused regulators of ignoring commercial considerations and caving in to political pressures, saying overregulation will reduce profitability and deter investment
The Greens and independents are calling on the government to redevelop and re-legislate the minerals tax, making it tougher for mining companies after the discovery that not a single cent will be raised in its first three months.
Construction unions are demanding the Labor government abandon an agreement that would allow Australian mining companies to bring in temporary workers from overseas. The special agreements were devised last year to ease labour shortages in the mining sector.
The Courier Mail
Labor frontbenchers claim a group of Gillard’s own MPs is pressuring the Prime Minister to abandon enterprise migration agreements through a report condemning the policy. The agreement would allow the resource sector to bring in semi-skilled foreign workers on a temporary basis. The report also touches on mining companies contributing more to local communities and spreading the benefits of the mining boom.
AAP senior political writer Paul Osborne states how the release of the Asian century white paper on Sunday has highlighted Julia Gillard and Tony Abbott’s belief that the future of Australia lies in Asia, particularly in agriculture, which is expected to grow from two per cent of Australia’s GDP to over five per cent by 2050.
The Courier Mail also reports on the mining tax, with Canberra-based firm Macroeconomics forecasting the mining tax will raise only half the revenue the government claims over the next four years. No link.
The West Australian
Standard and Poor analysts believe Western Australia’s reliance on mining sector royalties could create budget problems in the short to medium term.
BHP Billiton’s Nickel West has cut up to 100 support staff yesterday, although no mining or operational positions were affected.
North Australia Digest – 26/10/12