Warning bells over mining investment

An abrupt fall in mining capital expenditure may trigger a recession, with the next 18-24 months the greatest risk period, according to Morgan Stanley research, the Sydney Morning Herald reports.

With most analysts calling the peak of investment in the mining boom and a raft of poor economic data showing that non-mining sectors have not yet filled the gap, Australia's reliance on resources for GDP growth may pose problems.

Morgan Stanley analyst Gerard Minack said that mining investment may become a drag on growth this year, and while it was too early to declare a recession, “an earlier peak in mining investment also raises the risk that the decline in 2014 could be significantly more damaging than we have in our current forecasts”

China plans revolution to head off fiscal crisis

China is drawing up a blueprint for sweeping reforms aimed at averting an economic crisis, according to the Sydney Morning Herald.

The reforms are aimed at revitalising the world's second-largest economy amid deepening fears about a trend of rising corruption, wasteful investment and local government debt.

Liu He, who leads the party's Central Leading Group on Financial and Economic Affairs, has been given the task of preparing a seven-point blueprint for the Third Plenum of the 18th Communist Party Congress, which is due in about October, according to a source with close ties to several members of the Politburo Standing Committee.

If executed as intended, the new reform program will go some way to answering doubts about whether China can continue underwriting the Australian economy, including huge coal and other resource investment plans over the next decade.

Maitland partner slips up: ICAC

A business associate of former union leader John Maitland has been accused of “slipping up” in his evidence at a NSW corruption inquiry and revealing damaging information about the plan for a so-called training mine, according to the Australian Financial Review.

Newcastle entrepreneur Craig Ransley gave evidence at the Independent Commission Against Corruption on Friday that mining laws in NSW made it necessary for the men to pitch a plan for a training mine to persuade the minister to grant them a coal exploration licence without a tender.

Ransley and Maitland, a former national secretary of the Construction, Forestry, Mining and Energy Union, made millions after then NSW Labor mining minister Ian Macdonald gave them the licence at a dinner in December 2008.

The inquiry has previously heard the idea for a training mine was “spin” to get access to a lucrative coal resource in the Hunter Valley.