Controversy erupts over carbon floor price

The federal government is struggling to find a way to implement a $15 minimum carbon price when emissions trading starts in 2015 and it is negotiating with the Greens to redesign the complex scheme, according to the Australian Financial Review.

Despite widespread opposition to the $15 floor price from the energy industry and carbon traders, Climate Change Minister Greg Combet yesterday denied the government was preparing to dump the commitment to a floor price that was made to win the support of Greens senators.

There are reportedly considerable practical problems with the plan for a floor price through a “top-up” charge when the carbon scheme links to international markets in three years.

Senior government sources said it would be “very difficult politically” to walk away from the commitment to the minimum price and it could have implications for the budget.

ACCC gives nod to Glencore-Xstrata deal

The Australian competition regulator has given a tick of approval to the proposed $US65 billion merger of Glencore and Xstrata, saying the deal is unlikely to cause a substantial lessening in competition in the market for copper, nickel, cobalt, zinc, lead and coal, according to the Australian Financial Review.

The Australian Competition and Consumer Commission said it considered the impact any global impact the proposed acquisition would have on commodities markets would have “minimal impact” on local end users of those products.

The ACCC added that it did not consider there was a likelihood of anti-competitive effects arising from the vertical integration of Xstrata’s mining and production activities with Glencore’s extensive third-party trading activities.

“The ACCC noted that a significant proportion of sales in the relevant markets were direct sales, not involving any third-party trader, and considered that the merged entity would lack the requisite market power (at either the production or acquisition levels) to be able to engage in any foreclosure strategy to the detriment of other producers or traders,” the regulator said.

Chinese aluminium giant Chalco still keen on Cape York

Chinese aluminium giant Chalco says it could bid again for the Aurukun bauxite deposits on the Cape York Peninsula after burning $100 million in an unsuccessful attempt to shore up a mine and alumina refinery before being stripped of the leases by the Queensland government last year, The Australian reports.

The Hong Kong-listed aluminium giant and other potential bidders are believed to be pressing the recently elected Newman government, which plans to auction tenements, to do more work on environmental, native title and infrastructure issues before calling for tenders.

Rail imposes carbon tax surcharge

Rail operators warn the carbon price could backfire by providing a financial incentive for businesses to move more cargo on to heavier-polluting trucks and drive up the costs of groceries, The Australian reports.

Asciano's rail freight business, Pacific National, is imposing a 1.34% "carbon cost surcharge" on rail freight, with the diesel fuel rebate slashed by 6.21c per litre from July 1 under the Gillard government's carbon tax.