North Australia Weekly Digest – 01/03/2013

The Australian
Company directors and industry groups have accused the government of caving in to union pressures following its announcement to crackdown on skilled migrant workers. Business leaders have warned that turning away temporary skilled workers would damage employers and cut growth at a time of skills shortages and low unemployment. “I just wonder if anybody in Canberra understands the damage this does to confidence, to investment, and ultimately economic growth and job creation and incomes,” said Keith DeLacy, Nimrod Resources chairman and former Queensland treasurer.
Mining services company UGL will cut more than 1000 jobs globally after project delays and cancellations caused a 30 per cent slump in its first-half underlying net profit. Chief executive Richard Leupen said unstable commodity prices and the resources slowdown would lead to a $40 million restructuring effort, including slashing 700 jobs in Australia.
The Australian Financial Review
Outgoing BHP Billiton chief executive officer Marius Kloppers says demand for resources will slow over the next five years and miners will not be able to rely on strong commodity prices. “You have to be low cost and you have to take into account that price is not going to help you,” Mr Kloppers said.
Despite speculation, Duke Energy chief executive Jim Rogers says the US will not become a major exporter of energy in the immediate future, claiming the US shale gas industry will have to overcome political and industry barriers before it begins to export. As a result, Australian LNG supplies may continue to see high prices for “some time”.
The Pilbara’s three major iron ore ports closed on Monday in preparation of the arrival of Tropical Cyclone Rusty, which saw category 4 storms with winds above 200 kilometres an hour, as well as a “very dangerous” storm tides in the region.
The West Australian
The West Australian also commented on the government’s announced crackdown on the use of overseas workers to fill skill shortages, with business groups warning the proposal will add red tape to many operations in West Australia. Australian Mines and Metals Association chief executive Steve Knott said foreign workers would be needed to complete Australia’s $650 billion dollar pipeline of resource projects. “Skilled migration remains a very small, but very important part of our country’s resource investment opportunity,” Mr Knott said.
West Australia’s agriculture industry has spoken out about the challenges it faces, including cuts in live exports, a cattle disease investigation in the Kimberley, rising input costs, huge increases in pastoral rents and uncertainty over land tenure when leases expire. Pastoralists and Graziers Association Rob Gillam warned the Federal Government that the live export industry was suffering at the hands of its exporter supply chain assurance system: “We have to do something about our live exports… Our members have cattle they want to sell but can’t,” Mr Gillam said.
At the same time, West Australian sheep farmers have praised a breakthrough that will allow Australian lamb to be imported into India free of quotas based on Australia’s compliance with India’s food regulations. Sheep Industry Leadership Council Chairman Rob Egerton-Warburton welcomed the changes which will see Australian exports on the huge Indian market. “It’s a big win for WA because of our proximity to India and because we are predominantly an export industry”.
The Courier Mail
Australian Bureau of Statistics figures released yesterday suggest Australia’s mining boom has plenty of life left, with the peak “still some way off” as businesses plan to increase their investment spending in the next two financial years. HSBC economist Paul Bloxham said capital expenditure figures were positive: “Mining investment should rise further yet and plateau rather than peak,” he said.
Mackay-based Mastermyne has warned that earnings in the mine services sector will drop in 2013, but has predicted an overall return to normal conditions in 2014 as large numbers of infrastructure development are being tendered for the year. Managing director Tony Caruso said the sector has “bottomed out in terms of the slowdown”, expecting a brighter 2014.
NT News
Despite the recent gas deal made at Gove, jobs will still be lost at the plant after Pacific Aluminium recorded a loss of US$528 million last year. Rio Tinto, Pacific Aluminium’s parent company, made the announcement as part of its full year earnings report released on Thursday, which detailed several necessary write-downs by the company.