News Wrap

IN THIS morning’s News Wrap: Rio Tinto rethinks troubled Mozambique coal mine; war games to protect Australia’s resource riches; and unions return to Rio battlefield.
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Lou Caruana

Rio Tinto rethinks troubled Mozambique coal mine

Rio Tinto has launched a broad review of its Mozambique coal business to look at export transport options as well as the potential for joint ventures or asset sales, after last week’s shock $US3 billion write-down of the operations, according to the Australian Financial Review.

The formal review comes amid suggestions from coal industry sources with experience in Mozambique that the miner’s management style in the country, including its approach to relations with the government, may have hindered its progress.

Rio said last week it would write down three-quarters of the value of the $3.9 billion acquisition of Riversdale Mining made in 2011. The impairment led directly to the departure of chief executive Tom Albanese and former energy division head Doug Ritchie, as well as the appointment of Sam Walsh as Rio’s new global leader.

War games to protect Australia’s resource riches

War games will be stepped up in Australia’s north and west to protect $380 billion of largely remote oil, mining and gas assets that are vital to the economy, according to the Australian Financial Review.

The decision by the Gillard government is a response to a review of the location of military bases, equipment and personnel carried out in 2012 that warned a resource-hungry nation could in future pose a security threat to Australia’s lucrative assets, which were also vulnerable to terrorist attack.

The government has included in the draft white paper its response to the defence force positioning review released in May that recommended boosting defences in Australia’s north and west as a response to the rise of Asia, and particularly China.

Unions return to Rio Tinto battlefield

Rio Tinto has agreed to resume bargaining with the Australian Workers Union after almost 20 years of hostilities, in a landmark victory for unions that has implications for non-unionised workplaces across the nation, according to The Australian.

Two years after declaring war on the mining giant, the AWU has succeeded in using Labor's Fair Work Act to demonstrate a majority of the employees at the company's Bell Bay aluminium smelter in Tasmania want to be covered by a collective agreement.

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