News Wrap

IN THIS morning’s News Wrap: Australian coalminers returning to profitability; BHP Billiton says iron ore price unlikely to see $US100 again; and Atlas Iron calls for rate cut.

Lou Caruana

Australian coalminers returning to profitability

Profitability is starting to return to the Australian coal sector, with the number of loss-making mines reducing on the back of a weakening Australian dollar and sliding oil price, according to the Sydney Morning Herald.

The world's biggest producer of seaborne thermal coal, Glencore, estimated earlier this year that sliding commodity prices and high costs had rendered about 36% of Australian coalmines unprofitable.

But the near halving in the oil price since June has dramatically reduced the cost of powering equipment and mine sites, as well as helping to reduce the cost of shipping to Asia.

BHP Billiton says iron ore price unlikely to see $US100 again

BHP Billiton iron ore president Jimmy Wilson says the iron ore price is unlikely to see $US100 a tonne again, as any rise in demand from India is unlikely to compensate for the rapid increase in supply and economic slow-down in China, according to the Australian Financial Review.

“I have learnt never to say never, but certainly if you use basic economics then $US100 [a tonne] appears high going forward,” Wilson said in Shanghai.

Wilson said indications from the futures market that next year’s price would be settle around $US65 a tonne were “appropriate”

Atlas Iron calls for rate cut

Atlas Iron managing director Ken Brinsden has urged the Reserve Bank of Australia to cut interest rates to help bring down the Australian dollar and give a boost to the struggling resources industry, according to the Australian Financial Review.

Brinsden said the iron ore junior was doing everything in its power to make sure it has a competitive cost base but the Australian dollar’s stubborn position above US80¢ is having “a really big influence” on the company’s revenue.

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