Boom under threat from higher costs
A report by consultants at Port Jackson Partners published for the Minerals Council of Australia shows a loss of competitiveness means Australia lost market share in the decade from 2000 to 2010 in nearly all metals markets, despite a big increase in the volume of exports, The Australian Financial Review reports.
The study found that even in iron ore, Australia had lost its competitive advantage for all but established projects in Western Australia’s Pilbara region.
Iron ore projects in Australia are up to 75% more expensive to build than in west Africa.
High operating costs once in production make Australian iron ore less competitive in China than iron ore from Brazil despite the much shorter distance from Australia’s mines.
Only rising volumes will stop mining revenue declining because of increasing costs, the report says.
China gets serious about growth again
The Chinese government appears to be refocusing on economic management after months of political tension and there is speculation Beijing may initiate a fresh round of stimulus spending after implementing financial market reforms yesterday, the Australian Financial Review reports.
The new stimulus spending could be as high as 2 trillion yuan ($A320 billion), said local reports, although it might not be in a single package.
The moves follow a State Council meeting last week in which Premier Wen Jiabao stated “the need for a greater emphasis on growth” indicating the government would act to prevent a sharp slowdown in the world’s second-largest economy.
Bring in miners or miss best of boom
Australia risks missing out on an extra $121 billion a year from growing global demand for resources if it fails to allow more 457-visa-style migration agreements and to encourage more local workers to move to jobs on mining projects, The Australian reports.
Landmark research to be released today at the Minerals Council of Australia's annual conference in Canberra warns that rising labour, energy and transport costs, as well as a high exchange rate, are making projects less competitive.
BHP mega-projects put on hold
Expansion at BHP's Olympic Dam site in South Australia will not go ahead for at least six months, the Sydney Morning Herald reports.
BHP Billiton will not approve any of its multi-billion dollar projects within the next six months, according to chief executive Marius Kloppers.
In the clearest indication yet about the timing of BHP's future investments, Kloppers indicated to the Chinese media that no decisions on projects such as Olympic Dam, the Port Hedland outer harbour or the Jansen potash expansion would be taken until December at the earliest.
''You should not expect in the next six months any new major approval of projects,'' he told business website Caixin.com.
The comment indicates a delay to the scheduled ''mid-2012'' decision on the Olympic Dam expansion, and comes after recent confirmation that BHP is no longer wedded to a plan to spend $80 billion on its growth projects.
