North Australia Weekly Digest – 02/04/2013

The Australian
In this opinion piece, Adam Creighton highlights the fantastic level of growth that has occurred in the Northern Territory over  the last couple of years. However, he says  “the prospect of Coalition governments at both territory and commonwealth levels, Asia’s growing wealth, and growing community support for a big NT present the most favourable climate yet for development.”
China’s ongoing interest in investing in Australia’s resources sector is waning according to Gindalbie Metals’ Chairman George Jones. Speaking in Perth on the eve of the official opening of the Karar iron ore mine, Mr Jones said, “The enthusiasm from China has diminished, opportunities have been lost and wasted and while they will still do things here, there is going to be a lot of competition from other things they will be looking at.” Mr Jones said one of the biggest difficulties affecting Australia’s relationship with China was the way the government conducted itself, echoing similar comments from industry leaders about Australia needing to be more welcoming to foreign investment.
The Wall Street Journal showed that the volume Australian coal exports declined further last month due to damage to infrastructure caused by heavy rains. This disrupted a number of shipments, many of which were destined for Asia. Total exports from major Australian coal terminals fell 11.5 per cent during February from approximately 28.2 million tonnes to 24.9 million tonnes in January. Some key producers declared force majeure on contracts they were unable to fulfil.
West Australian Colin Barnett has said Woodside Petroleum’s $40 billion Browse gas project could face huge delays of up to 10 years if it does not reach a final investment decision by June. This comes as analysts fear building an onshore gas plant at James Price Point, near Broome, would not be economically viable due to high costs, with many suggesting a floating LNG plant could be a more economical option.
Royal Dutch Shell is looking to introduce LNG-powered trucks to Australia as part of a worldwide campaign to diversify the use of natural gas and create expanding markets in Australia beyond exports. This could help to curb high energy costs, particularly in the face of rising diesel prices. However, there are many hurdles to overcome in terms of supply, transport, storage and delivery, infrastructure and truck conversion, making LNG-powered trucks not a “short-term option”.
The Australian Financial Review
The Minerals Council of Australia has told the Productivity Commission that mining exploration is being restrained by high costs and a sharp increase in red and green tape. An analysis by consultant URS found there were 144 pieces of primary legislation for miners wanting project approval, up from 94 in 2006, including an almost doubling of subordinate legislation from 66 to 119. The submission by the Minerals Council of Australia says Australia is no longer as attractive a destination for investment. “This trend makes it more critical than ever for Australian governments to address all barriers to exploration as each cumulatively weakens Australia’s competitive position,” the group says. “The barriers in Australia are not unique and removing them offers the real prospect of restoring Australia’s competitive advantage”.
The Minerals Council of Australia has launched an advert this week that warns of the consequences the industry faces in Australia if costs continue to rise. “Tax mining too heavily, we lose projects, exports and jobs to other mining countries with lower taxes. And Australians everywhere are the losers,” The advert says.
ExxonMobil has made plans for a floating liquefied natural gas project at its Scarborough gas field off the Western Australian coast, which will be owned jointly with BHP Billiton. The preference to develop the 6 to 7 million tonne-a-year project offshore highlights the rising cost of onshore plants.
West Australian premier Colin Barnett has said that two big iron ore infrastructure projects could “still be pushed through” despite escalating costs and volatile commodity prices. Barnett claimed that China’s demand for resources will continue to fuel growth in Western Australia, even though the country’s economic growth is expected to slow to a rate of about 7 per cent a year for the rest of the decade. “If China settles down in the 2020s and grows at 5 or 6 per cent, that’ll do me,” the Premier said. “That’s going to be absorbing a huge amount of natural resources from Western Australia”. Despite this, several iron ore infrastructure projects backed by the government had already been frozen.
The West Australian
Toro Energy’s Wiluna project in Western Australia has received final environmental approval from the federal government under what Environment Minister Tony Burke has called “strict conditions”. The project, which has already received approval from the West Australian government, will be subject to 36 conditions to guard against groundwater contamination and to ensure the safety and rehabilitation of the site for years to come. Toro’s managing director Vanessa Guthrie said uranium production at the site would be “very safe” as it is not a bulk commodity but a “high-value, low-volume” commodity. Exports from the Wiluna site are expected to begin in 2015.
The NT News
According to data from the Australian Bureau of Statistics, accommodation in hotels, motels and serviced apartments rose 7.4 per cent in the three months to December across the Northern Territory – a period that is usually quiet in the region due to the wet season. The Australian Bureau of Statistics said that the increase may be “a result of the multi-billion dollar gas projects in the area,” which was confirmed by Tourism NT chief executive Tony Mayell, who said “It’s all around corporate traffic”.