Rio energy boss swings axe to cut coal costs

Rio Tinto energy chief Harry Kenyon-Slaney is on track to reach $1 billion in savings by the end of the year – a third of chief executive Sam Walsh’s target of $3 billion in company savings by 2015, according to the Australian Financial Review.

Kenyon-Slaney said Rio had shaved $30 a tonne from the cost of coal production as of December and was reducing it further this year.

Deteriorating coal prices, surging costs, high taxes and a stubbornly high Australian dollar had put a vice-like grip on the industry, he said.

Rio has started to recycle waste material from its coking coal operation at Hail Creek in Queensland and turn it into thermal coal product, which is then sold at low cost.

About 300,000 tonnes of coking coal production is being swapped for recycled thermal coal product because it is lower cost and attracts higher margins in the current climate.

China's clean air quest to drive LNG investment, says Santos

Santos' head of liquefied natural gas markets, Peter Cleary, has pointed to Canada and Mozambique as Australia's biggest competitors for new LNG investment, despite last week's $US400 billion deal for China to import vast quantities of gas by pipeline from Russia, according to the Sydney Morning Herald.

Cleary said the deal between Russia and China left plenty of scope for Australian LNG to compete in Asia, as well as China, where pressure for better air was likely to drive stronger demand for gas than many expected.

“China needs all solutions, not one solution, for its energy needs,” he said before an address on Tuesday at an Asian LNG summit in Beijing.

He said the Russian deal would provide a “great chunk of gas” when the pipeline starts up late this decade, but "by then there will be plenty of users" demanding deliveries.

AGL MacGen buy would cut competition and not lower prices, warns ACCC

The competition watchdog has warned there would be ‘‘significant detriment’’ if AGL’s proposed purchase of the country’s largest power generator, Macquarie Generation, was to proceed, while public benefits would be ‘‘small’’, and would likely to accrue to AGL, according to the Australian Financial Review.

The Australian Consumer and Competition Commission (ACCC) has blocked the planned acquisition, with the Australian Competition Tribunal now to decide whether it should proceed.

“The public benefits that are likely to result from the proposed acquisition are small,” the ACCC said in its submission to the Tribunal. “The benefits ... would largely accrue to AGL and are extremely unlikely to be shared with the broader community.”