More pain ahead for coal: BHP and Rio
Mining giants BHP Billiton and Rio Tinto have warned the combination of high costs, taxes and the strong Australian dollar have put a “vice-like grip” on the $60 billion coal industry that will force further mine closures and job losses this year, according to the Australian Financial Review.
About 12,000 jobs have been cut from the sector over the past two years amid a string of mine closures and delays to projects by companies  including BHP, Rio, Glencore, Vale and Peabody Energy.
BHP global coal president Dean Dalla Valle said there would be “difficult times ahead in a period of such oversupply”, particularly given many operators were not making money at the depressed prices.
“You will see the industry adjust itself, shake itself out. You are going to see more exits from the market.”
While both miners remain confident in the long-term outlook, they predict a brutal period ahead for the industry as prices remain under intense pressure.
The contract price of premium hard-coking coal has fallen to $US120 a tonne in the June quarter from $US330 a tonne in 2011, while thermal coal prices have dropped to $US74 a tonne on the spot market from $US125 in mid-2011.
Miners have been struggling to keep their Australian coal operations profitable amid deteriorating prices, surging costs and a high Australian dollar.
Heavy rains hurt gold mine production
Industry consultant Surbiton Associates said gold output in Australia, the world's second-biggest producer, fell in the first quarter after a key mining region was inundated by heavy rainfall, according to the Sydney Morning Herald.
Production was 68 metric tonnes in the three months through March, about 7% less than in the fourth quarter of 2013, Melbourne-based Surbiton said in a statement. Output was 8% higher than in the same period a year earlier, it said.
A tropical low brought heavy rain to the Goldfields region of Western Australia in mid-February, inundating Regis Resources Ltd's Duketon site with about 165mm of rain and submerging its Garden Well mine under about 4.7 million cubic metres of water.
Full mining might resume in June, the Perth-based producer said last month.
“As well as mining and haulage problems, wet, sticky ore affects crushers and conveyor belts,” said Surbiton director Sandra Close.
“Heavy rain can also restrict the supply of diesel and other consumables to remote mine sites.”
Bullion has advanced 7.7% this year as concerns over the economic recovery in the US and tensions in Ukraine spurred haven demand. The metal has rallied after its largest annual decline in three decades last year.
Rusal warns of investment risk
Russian aluminium giant Rusal has slammed the investment climate for value-adding minerals processing, saying the key advantages Australia once enjoyed around energy and
sovereign risk were being destroyed, according to The Australian.
“The industry in Australia is faced with development hurdles that pose significant obstacles for investment,’’ Rusal Australia chairman John Hannagan said.
