Origin Energy chief executive Grant King has called for a review of the carbon tax and Australia’s renewable energy target, saying they continue to put the country at a competitive disadvantage. “Australia is increasingly standing alone in respect to the level of its carbon pricing, its renewable energy targets. It’s now way out – nowhere near – ahead of the countries with which it competes economically,” King said.
Macquarie Research has downgraded its forecast on commodity prices, highlighting concerns about future demand in the face of a flailing global economy. The research unit said that despite China’s economic growth, demand for raw materials had remained low, particularly in Europe and other parts of Asia. Goldman Sachs and Citi have also cut their 2013 price outlook for several commodities.
According to the latest National Accommodation Barometer, revenue from the mining accommodation sector has fallen 20 per cent in the last quarter due to slowing investment in resources projects and falling commodity prices. Revenue per available room dropped 10 per cent overall, with occupancy down 7.1 percentage points compared to the same period last year. “This points to a change in approach from mining companies who are looking to rein in expenditure,” said acting Tourism & Transport Forum chief executive Trent Zimmerman.
The Australian Financial Review
Chairman of BG Australia Catherine Tanna has slammed the nation’s regulatory system, labelling the country as “hopelessly overgoverned”. Tanna also launched an attack on the “vocal minority of environmental groups” who continue to pressure the government into whimsical decisions on regulatory policy. “The duplication of regulation on so many fronts just has to be looked at and it needs to be looked at independently so the outcomes can be acted on,” Tanna said.
Minerals Council of Australia chief executive Mitche Hooke has likened the tax imposed on mining companies in Australia to a “Mount Everest” compared with international tax rates. Speaking at a Senate inquiry into the MRRT, Hooke said he did not believe the tax was necessary and that it stifled investment: “So anything that puts us at a disadvantage in terms of international competitiveness is what is the lead in our saddlebags and if that can’t be justified in efficiency dividends, environmental dividends, social dividends and economic dividends, then we’re really cutting off our nose to spite our face,” Hooke said.
Rio Tinto subsidiary Coal & Allied and Arafura Resources have been forced to cut 40 employees and reconsider development plans in the face of rising costs and increased regulatory burdens. This comes two weeks after Coal & Allied managing director Darren Yeates slammed the Land and Environment Court for overturning an approval for extension, which he said put 1300 jobs at risk. “The unfortunate reality is this decision has come at a time when the Australian coal industry is struggling to remain globally competitive in the face of high costs, a strong Australian dollar and low prices,” Yeates said.
Barclays Chairman Grant Porter has said North America may become much more competitive in LNG supply than previously expected, and could begin rivalling Australia as the largest global exporter of the commodity by 2020. “North America and Australia sort of vie with one another for the number one position on LNG market supplies… It will be the cost competition between the two as to who is the biggest,” Porter said.
Woodside chief executive Peter Coleman has endorsed Shell’s floating LNG process as the fastest way to develop the Browse Project in Western Australia, despite WA Premier Colin Barnett’s strong opposition. This comes three weeks after Woodside shelved its onshore LNG plant at Browse due to rising costs.
A Deloitte Access Economics report has warned that a huge slowdown in mining investment currently occurring in Australia could have a substantial impact on the health of the economy. The report comes as over $30 billion worth of projects were scrapped in the March quarter. The report also warns the next nine biggest projects pencilled in for approval in 2013 seem no closer to getting the green light, which could result in a massive plunge in projects if they don’t get the go-ahead. “The non-resources manufacturing investment has all but dried up in Australia, and there is no prospect of an investment resurgence at present, given the high Australian dollar and other competitiveness factors.”
The West Australian
Mackie Employer Solutions have shown that staff turnover at mining companies has dropped significantly in the last six months to 14.8 per cent annually, figures which have not been seen since the global financial crisis. These statistics reflect the increasing number of layoffs, deferred and suspended projects and a renewed focus on cost reduction among companies. Curtin University School of Mines director Steve Hall said the job market has been tightening. “A few years ago there were three jobs for every graduate. Now it’s definitely a bit harder,” Hall said.