News Wrap

IN THIS morning’s News Wrap: China’s creeping threat to Australian coal; mining taxes bring in nearly $23 billion, report says; and GE urges Africa investment.

Lou Caruana

China’s creeping threat to Australian coal

Beijing’s move to close coal-fired power plants and ban coal use is expected to be followed up in neighbouring provinces as the Chinese government attempts to reduce chronic air pollution across its major cities, according to the Australian Financial Review.

The latest announcement from the capital is part of a broader shift in China towards clean energy, which poses a long-term challenge for the Australian coal industry.

However, analysts said Beijing’s decision, announced late Monday, to ban coal sales in its six main districts as well as close coal-fired power plants by the end of 2020 will have a limited impact on Australian miners in the near term.

“China consumes roughly 4 billion tonnes of coal per year and, of that, Beijing accounts for just 15 million tonnes,” said Wood Mackenzie China consulting manager Rohan Kendall.

Mining taxes bring in nearly $23 billion, report says

The mining industry’s tax and royalties bill is expected to come in at $22.7 billion for financial 2014, the second-highest tax take on record, according to data the sector will use to pressure the Senate over the stalled repeal of the Minerals Resource Rent Tax, according to the Sydney Morning Herald.

Mineral Councils of Australia chief Brendan Pearson says the industry’s bill remained high, despite a drop of almost 50% in commodity prices since the lofty heights of 2011-12.

“This does underline that we are paying an effective tax rate above 40%, when you combine the tax rate and the royalties,” Pearson said.

GE urges Africa investment

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The boss of General Electric issued a clarion call to businesses to take advantage of the great opportunities that exist in Africa, according to The Australian.

Speaking at the start of the first US-Africa leaders summit in Washington, Jeffrey Immelt warned that companies risked losing out to European and Chinese operations on the continent.

“In order to play, you have to show up,” the chairman and chief executive of GE said. “The Europeans have been there for decades. The Chinese are a growing focus. American businesses have not been as evident on the ground. We have to show our face.”

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