North Australia Digest – 6/9/12

Here is a digest of today’s major stories that impact North Australia:
Australian Financial Review
Fortescue Metals Group is under increasing pressure to raise equity to shore up its balance sheet, despite its decision to delay part of its $US9 billion expansion project to conserve cash.
Falling iron ore prices may prompt the Reserve Bank of Australia to bring forward interest rate cuts if commodity prices fail to recover.
Australian iron ore exporters are facing increasing pressure to sell their product at discounted rates, with Fortescue Metals Group now believed to be sending shipments to customers in China without guaranteed payment.
Resources Minister Martin Ferguson backed Gina Rinehart’s statements about high operating costs in the Australian mining industry as Prime Minister Julia Gillard mocked the heiress’s wish for cheap labour.
A contraction in the mining industry, triggered by lower commodity prices, and tighter household spending more than halved economic growth last quarter, and Treasurer Wayne Swan admits it is becoming harder to deliver a budget surplus.
Australia has a strong regime for regulating foreign investment but failure to explain this could undermine community support and risk future investment flows, former Treasury secretary Ken Henry says.
Federal cabinet’s leading advocate of liberal foreign investment policy, Trade Minister Craig Emerson, has used his involvement in an international forum on the threat of global food crisis to call for the rejection of a Nationals party-led campaign to keep Australian food production in Australian hands.
The federal opposition is considering Gina Rinehart’s push for a special economic zone in Australia’s north.
Treasury Secretary Martin Parkinson has weighed into the heated political debate about Chinese purchases in Australia, warning the country would have much lower living standards without foreign investment.
The Australian
The latest dramatic shift in Labor policy – involving billions of dollars, long-term investment decisions and impacts on the daily lives of workers – highlights the thread of uncertainty that has run through the Rudd and Gillard governments: sovereign risk.
Industrial disputes have undercut the nation’s economic performance as other countries leap ahead of Australia on a global competitiveness survey that is used to guide business investment.
The government’s Asian Century white paper looks like arriving too late. Asia’s skyrocketing growth, on which it is premised, is fading as the government’s document, originally due for release mid-year, is prepared for cabinet.
Mining billionaire Gina Rinehart’s bold plan for northern Australia to become a special economic zone with tax and red-tape exemptions has failed to win support from Labor or the Coalition.
The latest survey of the nation’s leading law firms shows they believe the resources boom is past its peak.
Investors have lost faith in predictions of a rebound in iron ore prices and bullish outlook on another decade or two of Chinese steel growth, wiping $4 billion from the value of local iron ore stocks yesterday.
Treasury secretary Martin Parkinson and his predecessor Ken Henry have criticised  “populist” objections to foreign investment as the Greens yesterday lined up with Nationals senator Barnaby Joyce to oppose the sale of Cubbie Station to a Chinese company.
Herald Sun
Terry McCrann defends Gina Rineheart: ‘Gina Rinehart did NOT call for Australian wages to be cut to $2-a-day African levels.’
The Age
Fortescue Metals has had to reassure a range of international banks about its stretched financial position after plunging iron ore prices forced it to cut its expansion plans and sell assets to reduce its high levels of debt.
The slight fall in the overall sharemarket yesterday masks a severe downturn that is taking place in the construction, engineering and mining services sector.
Barnaby Joyce last night resisted strong pressure from Opposition Leader Tony Abbott to back off his public attacks on the sale of Cubbie Station to the Chinese, as the Nationals prepare for a crisis meeting on the issue, which is deeply dividing the Coalition.
Sydney Morning Herald
Treasurer Wayne Swan has leapt on Coalition division over the sale of the huge cotton-producing Cubbie Station to Chinese investors, as Nationals Senate leader Barnaby Joyce condemned it as against Australia’s national interest.
NT News
The Greens have backed Nationals senator Barnaby Joyce on opposing the sale of Cubbie Station to foreign owners.