Cost-cutting leaves Australian coal healthy: Wood Mackenzie
Global consultancy Wood Mackenzie is upbeat about the position of Australia’s coal mines, saying they are generally well-positioned to weather the storm of weak prices after significant and “remarkably successful” cost cutting, according to the Australian Financial Review.
Head of coal supply research Ben Willacy said yesterday that while about half of the world’s metallurgical coal mines were not making money at current prices, several mines in Australia run by majors such as BHP, Anglo American and Rio were “actually making a decent margin” at the June-quarter contract price of $US120 a tonne.
Rio is set to deliver record production from its thermal operations in Australia this year. BHP also runs its operations to capacity.
This allows the miners to sell spot volumes at lower prices and still make a profit because the increase in tonnage reduces total costs per tonne. However, other producers are suffering as a result, Willacy said.
Ore price drop a boon for nation’s big producers
The iron ore story is now one of product displacement, because China will have to remove up to 100 million tonnes from its domestic market if the price continues to hover around $US90 a tonne, according to The Australian.
While some of Australia’s junior iron ore miners and high-cost producers struggle with margins at $US90 a tonne, Australia’s big producers will be the winners.
Mundine calls for release of Andrew Forrest report
The head of Tony Abbott’s indigenous council, Warren Mundine, has urged the government to release a review of indigenous training and employment by mining magnate Andrew Forrest, according to the Australian Financial Review.
In some of his most critical comments of the Prime Minister to date, the former Labor Party president turned government adviser said the Indigenous Advisory Council had called an extraordinary meeting with Abbott to discuss the review by Forrest.
Mundine also accused the government of adding to an atmosphere of “distrust and fear” between the government and Aboriginal communities by failing to deliver a plan for jobs to offset budget cuts.
