No MRRT from coal, says UBS

Analysts at UBS are expecting the Minerals Resource Rent Tax, which is on iron ore and coal, to net no coal income because of sliding profitability in the coal sector, according to The Australian.

Rio has flagged it will shelve expansions, while there are growing doubts Xstrata will go ahead with its $A6 billion Wandoan mine in Queensland.

Last week, Peabody Energy cut its Australian 2012 production forecast by 1.8 million tonnes because of troubles with contract miners and weak markets.

The price drop, if it continues and stays depressed, has the ability to further slash MRRT expectations.

Iron ore, the nation's biggest export and the main target of the federal government's mining tax, has continued a two-week price slump, falling to a two and a half-year low as Chinese demand continues to wane.

Prices have now fallen for 13 straight sessions and are down 14% in that time.

Abbott firms up foreign investment crackdown

Opposition Leader Tony Abbott has stepped up his push for a tighter foreign investment regime just as China has opened up foreign investor access to its capital markets, according to the Australian Financial Review.

Abbott yesterday hinted he would change the Foreign Investment Review Board’s make-up as he dealt with a Coalition split on a stricter national interest test by siding with the Nationals in support for changes to the regulator.

“I think you can always improve things and we’ll be releasing a paper shortly that will include some improvements, but we have a good foreign investment review regime; it served us well in the past and I think it will serve us well in the future,” Abbott said in Sydney on Sunday.

The opposition’s reiteration of the need for change after Mr Abbott raised the issue in a speech in Beijing last week may add to Chinese concerns about a tougher future Australian government approach.

BHP investors query Olympic Dam start

BHP Billiton investors have urged the miner to exercise restraint as it considers a decision on the $20 billion-plus expansion of South Australia’s Olympic Dam site, as falling commodity prices and weaker demand shake confidence in the project, according to the AFR.

Amid growing signs that BHP may delay its decision on the investment, more investors are saying they would be happy for the company to preserve capital or prioritise other major projects, such as the outer harbour expansion at Port Hedland.

“There isn’t any necessity that it goes ahead this year and, given the uncertain macroeconomic environment, it is probably prudent that the company defers the decision if it can,” said a portfolio manager at Pengana Global Resources Tim Schroeders.

“The obvious caveat there is whether the conditions allowed by the South Australian government are capable of being maintained or enhanced in any future go-ahead of the project.”

BHP had been expected to make a final decision to proceed with the Olympic Dam investment before the expiry of an indenture agreement – which sets the royalty payment levels at the copper-uranium-gold mine for 45 years – on December 15.