News Wrap

IN THIS morning’s News Wrap: mining, energy companies set to bounce back strongly; Fortescue says ‘not obligated’ on Pilbara; and Rio Tinto automation key to ore hitting 400Mtpa.

Staff Reporter

Mining, energy companies set to bounce back strongly

Australia’s largest mining and energy companies are poised to deliver a substantial increase in profits in the coming year, amid growing signs the downturn that marred last month's reporting season will be short-lived, according to The Australian.

An analysis of the earnings of Australia's 20 largest resources companies confirmed a substantial decline in profitability during the past year as high costs and falling commodity prices destroyed earnings and prompted billions of dollars in asset write-downs.

Fortescue says ‘not obligated’ on Pilbara

Fortescue Metals Group is standing by its belief that it is not obliged to open negotiations with Brockman Mining over access to its Pilbara rail network, despite Western Australia’s economic regulator handing its adversary another minor victory, according to the Australian Financial Review.

The WA Economic Regulation Authority made a determination on the rates Fortescue has proposed charging Brockman if it was successful in gaining access yesterday, ruling that they were not appropriate.

Fortescue had proposed a floor price of $73 million a year and a ceiling price of $576 million a year for reserving 20 million tonnes of capacity on a 196.5km stretch of rail between its Christmas Creek mine and Port Hedland.

Rio Tinto automation key to ore hitting 400Mtpa

Deutsche Bank believes Rio Tinto could boost its annual iron ore production capacity from a proposed 360 million tonnes to over 400Mtpa if the global resources company’s automation efforts are successful, according to the Australian Financial Review.

Rio’s board is yet to make a decision on how much to invest and over what time frame on greenfield and brownfield mine developments, which would result in a step up of production from 290Mtpa to 360Mtpa.

The company has already approved $US5.9 billion to lift the capacity of its infrastructure in Western Australia’s Pilbara region, which has been mostly built.

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