News Wrap

IN THIS morning’s News Wrap: government not the issue, says Clough boss; wisdom of BHP's Canadian potash push in question; Mongolia signals decision closer on Oyu Tolgoi financing.

Staff Reporter

Government not the issue, says Clough boss

A veteran of Australia's oil and gas sector says industry complaints that government regulation is to blame for Australia's productivity issues is a “lame excuse”, with poor leadership and management a significant factor in the country's perceived under-performance, according to The Australian.

Kevin Gallagher – managing director of specialist oil and gas contractor Clough and the former head of Australia's largest industrial project, Woodside Petroleum's North West Shelf liquefied natural gas plant ¬– told The Australian that management had a bigger influence on Australia's productivity than policy.

Wisdom of BHP's Canadian potash push in question

BHP Billiton's decision to pump another $US2.6 billion into developing the Jansen potash project in Canada – without committing to a firm production start date – has reignited debate about whether the group's move into the crop nutrient would not be better achieved by acquiring existing production rather than building new capacity in the currently oversupplied market, according to The Australian.

The fresh capital for Jansen was revealed by BHP chief executive Andrew Mackenzie on Tuesday. It takes to more than $US3.8 billion the amount already spent and committed on Jansen, potentially the world's biggest producer of potash, should BHP eventually commit to spend the $15 billion needed to get it to that level some time after 2020.

Mongolia signals decision closer on Oyu Tolgoi financing

Rio Tinto could have greater clarity on the proposed multi-billion dollar project financing required to develop the underground mine at Oyu Tolgoi in Mongolia after reports the country’s parliament is considering calling an emergency meeting and returning earlier than expected, according to the Australian Financial Review.

Rio was forced to delay all funding and work on the second underground development phase at the Oyu Tolgoi mine in July until it determined whether project financing for the project had to be approved by the Mongolian parliament. The delay resulted in 1700 job cuts at the mine this month.

Oyu Tolgoi is still exporting copper and gold concentrate to customers and other infrastructure projects outside of the underground mine are continuing despite the uncertainty over the additional project financing. More than 40,000 tonnes of concentrate has already been produced at Oyu Tolgoi.