There has been a burst of new resources projects planned according to the latest Deloitte Access Economics investment survey released this week. The increase could extend the mining boom for years beyond the expected peak in construction work expected in the next 12 months. The report shows last quarter has been the best for new venture announcements since the September quarter of 2011. There are resource projects worth $226bn in the planning stages awaiting a firm go-ahead. Just 10 of these, worth a total of $126bn, have final investment decisions due this year. There are four LNG projects worth a total of $86bn waiting for approval, of which the biggest is Woodside’s $43bn Browse Basin project.
Australia’s agricultural sector has been lauded as on the cusp of a major boom in recent times, many analysts believe Australia’s continued economic prosperity, after the mining boom is over, will depend on agriculture and its ability to feed Asia’s expanding middle class of 2.3 billion by 2030. But, in rural Australia, the hyperbole is not translating into practical benefits at the farm gate. Instead, discontent is growing at prices being paid to farmers for milk, fruit, vegetables, lamb and beef. Australian Farm Institute director Mick Keogh says the future food bowl vision and the accompanying food boom will eventuate. But with the Australian dollar so persistently high, Keogh admits Australia’s farm exports will continue to find it tough going.
Australia’s position as a major ally of the United States is set to continue with an increase in the number of US Marines in Darwin being discussed. Chief of US Pacific Command (PACOM) Samuel Locklear, speaking in a teleconference from Hawaii, said Australia is a “critical pillar” in the US pivot toward Asia, and the rebalancing of its military strategy.
The Australian Financial Review
Gas producers Santos and Eni have dashed hopes of a last-minute deal being brokered by the Northern Territory government on gas supply for Rio Tinto’s Gove alumina refinery, increasing the chances that production at the plant may be suspended. Rio’s Pacific Aluminium unit, which owns Gove in Arnhem Land, had until January 31 to complete a strategy review of the loss-making operation before a decision by Rio on whether to temporarily shut or scale back operations at the refinery.
Northern Territory Chief Minister Terry Mills has refused to give up on hopes of securing natural gas supplies for Rio Tinto’s Gove alumina refinery and will pursue talks in Europe even though Rio’s deadline for tying up a deal has passed. Mr Mills said on Friday he would first go to Canberra to stress the importance of gas supply for national energy policy, before departing for Europe. He didn’t specify whom he would meet with.
Royal Dutch Shell has been forced to adopt a ‘go slow’ policy on new projects in Australia due to escalating costs. Casting doubt on the timing of some $70 billion-plus of liquefied natural gas projects. Chief executive Peter Voser told investors last night in London that Shell had “slowed the pace on new FIDs [final investment decisions] for LNG in Australia, where there’s cost inflation pressures.” Mr Voser said Shell would “take more time” before expanding the Gorgon LNG venture which suffered a massive cost blowout late last year to $52 billion, and on the Arrow coal seam gas-based LNG venture in Queensland with PetroChina.
Sydney Morning Herald
The Australian Agriculture Company has blamed a $41 million write-down of its northern Australian properties squarely on the federal government’s 2011 ban on live cattle exports and the subsequent decline of the trade. AACo managing director David Farley said the deliberate disruption of the live export trade, ”took the commerce out of the north”. Just this week the live export-geared 5414 square kilometre Killarney Station, in the Northern Territory, was placed into receivership by NAB. Mr Farley said the Filipino-owned Killarney was ”a beautiful property” and the receivership was a direct consequence of the live cattle ban.
The Courier Mail
Australia’s relationship with Indonesia is yet to recover from 2011’s live cattle export, according to AACo’s managing director David Farley. Mr Farley said “relationship-building with our Indonesian neighbours” was pivotal in reinvigorating North Australia’s economy. The cattle group has also put “major elements” of its Darwin abattoir development to tender, which Mr Farley said would “put more stability into our business”. The abattoir would reduce transport costs – the cattle are normally shipped to abattoirs on the east coast for slaughter – and allow the company more control of its supply chain.
The West Australian
The West Australian Environmental Protection Authority has moved to streamline the approval process for the Chinese-owned company granted exclusive rights to develop a sugar industry on the Ord River. In a report released yesterday, the EPA recommended the removal of a host of conditions and proponent commitments dating back more than 10 years to when Wesfarmers and Marubeni sought to develop a sugar industry.