Anglo American admits coal mines are running at a loss
Anglo American chief executive Mark Cutifani has urged rail operators to find ways to reduce the costs of coal haulage contracts, admitting the agreements are causing some Australian mines to run at a loss, according to the Australian Financial Review.
Cutifani said his Australian executives were attempting to renegotiate take-or-pay contracts with operators such as Aurizon and Asciano at a time when coal prices were “ugly”
There has been speculation the world’s biggest resources companies could be running Australian coal mines at a loss because the fixed costs of the rail contacts mean it would cost more to close them.
Asked if this was the case for London-based Anglo – which struck some rail contacts at the peak of coal prices in early 2011 – Cutifani said: “It certainly is”
BHP cuts 170 Mount Whaleback jobs
On Monday BHP Billiton cut 170 jobs at its Mount Whaleback iron ore operations in the Pilbara, less than a week after retrenching about 100 workers at its iron ore division headquarters in Perth, according to the Sydney Morning Herald.
The latest round of retrenchment comes as part of BHP's cost cutting and productivity drive, which is also seeing it ramp up production of iron ore in the Pilbara despite weakening iron ore prices.
BHP is sweating its assets hard and trimming all possible fat across its operations in part to better protect the company from volatility in the iron ore price but also to make up for past management mistakes.
Sundance goes on hunt for offshore investors for African project
Sundance Resources chairman George Jones says he is looking to drum up interest in China and from traditional western investors to finance the infrastructure for its flagship $US4.6 billion ($A4.9 billion) iron ore project in central Africa, after being “very disappointed” by the lack of appetite from Australian quarters, according to the Australian Financial Review.
On Friday, Perth junior Sundance struck a long-awaited deal with a Portuguese firm for the construction of $3.5 billion in port and rail – underpinning its Mbalam-Nabeba project, which straddles Cameroon and the Congo.
But the financing for the infrastructure – and another $1.1 billion to bankroll the iron ore project – are still up in the air.
Sundance has been inching towards construction for its project and it has been a long emotional road after a plane crash in the Congo in 2010 claimed the lives of six of its executives.
