News Wrap

IN THIS morning’s wrap: BMA strike squeezes coking coal; one year to breathe before taxman digs; Xstrata subsidiary charged over fuel spill; and QR National to slash 500 jobs as it looks to outsourcing.
News Wrap News Wrap News Wrap News Wrap News Wrap

Union members, image courtesy of the CFMEU.

Lou Caruana

BMA strike squeezes coking coal

A squeeze on coking coal supplies due to industrial action at Australia’s Bowen Basin mines has helped drive the price up 7% in the September quarter, the Australian Financial Review reports.

Research group Platts has reported that Anglo American has settled third-quarter prices with Korean steel maker Posco at $US225 a tonne, $US3/t above the current spot price and up on last quarter’s $US210/t.

“We would expect the $US225 a tonne to become the third-quarter benchmark, given the parties and product involved,” Royal Bank of Canada analyst Chris Drew said. “This hard coking coal settlement is up 7 per cent versus the second-quarter settlement, with the increase reflecting the market tightness arising from BMA’s continued industrial dispute.”

Workers at the BHP Mitsubishi Alliance-operated mines in Queensland walked off the job for a week in late May.

The move is expected to exacerbate the already tight supply of high-quality coking coal in the market. Increasing supply from the US and Canada has also driven a wider differential between the price of semi-soft coking coal and pulverised coal injection coal.

One year to breathe before taxman digs

The Australian Taxation Office will wait a year after the introduction of the minerals resource rent tax before getting tough on compliance, when it will target the biggest players in the mining world, the Australian Financial Review reports.

From next month, the 22.5% MRRT will apply to sales of coal and iron ore, including by industry giants BHP Billiton, Rio Tinto and Xstrata, which brokered a softer regime and are expected by some to pay little.

“Obviously we’ll be looking at the bigger players,” ATO deputy commissioner Stephanie Martin said. The office would also focus on those more likely to struggle with implementation, such as smaller miners, she said.

Nearly one-third of Martin’s 120-strong team, which covers the petroleum resources rent tax as well as the MRRT, is focused on active compliance.

Xstrata subsidiary charged over fuel spill

A subsidiary of Swiss mining giant Xstrata is facing a fine of more than $1 million for leaking thousands of litres of fuel at a Northern Territory mine, according to the Australian Financial Review.

McArthur River Mining notified the NT Department of Resources in May last year that a leak had been detected from a pipe connected to the main fuel storage area at its zinc mine at Borroloola.

A statement from the department said the valve was believed to have been open for nearly two days and it was estimated more than 27,000 litres of diesel had leaked into the ground.

The NT government slapped MRM with a complaint of serious environmental harm, which if proved would mean a maximum penalty of $1.05 million.

The matter was brought before the Darwin Magistrates Court last week.

MRM general manager Ettienne Moller said the company would address in court the matters raised in the government's complaint.

QR National to slash 500 jobs as it looks to outsourcing

Minerals carrier QR National plans to shed at least 500 jobs, primarily in Queensland, as part of its journey from a state-run organisation to a listed company, The Australian reports.

The company, sold off by the previous Queensland government late in 2010, yesterday announced it would start consulting unions to address what it called "legacy issues" that had built up since it was fully owned by the state government.

The restructuring will largely be aimed at the company's workforce in its two core areas of carting coal in central Queensland and railway maintenance.

The company will no longer build coal wagons and instead will outsource their construction, which will affect its maintenance depot at Redbank near Ipswich, and the company will seek more flexible rostering arrangements for train drivers.

Work performed at some smaller depots, such as those at Hughenden, Charleville, Mt Isa and Emerald, might be undertaken at larger depots.