News Wrap

IN News Wrap: Mines face closure on iron ore price slide; Black future for US coal; and Woodside Petroleum calls for alignment on Sunrise gas.

Lou Caruana

Mines face closure on iron ore price slide

Three Australian iron ore mines are at risk of closure as the profitability gap between the major producers and the rest of the sector widens, says resources consultancy Wood Mackenzie, according to the Australian Financial Review.

The price for the key steel-making commodity was just $US61.20 a tonne on Tuesday, the lowest since May 2009 when the current pricing system was introduced. The relentlessly plummeting price is down 14% this year after crashing 47% in 2014.

Black future for US coal

US coal miners are feeling the pain of a slow decline, according to the Australian Financial Review.

Shares in Arch Coal, Alpha Natural Resources, Walter Energy and Peabody Energy, have halved in the past year. Creditors are scared.

In recent weeks Arch, Walter and Peabody have cut or eliminated dividends to preserve cash. Peabody is working with its lenders to loosen the demands of its loans. Arch's bonds trade below 30 on the dollar; last year it was loss-making before its $US 400million in interest costs.

Woodside Petroleum calls for alignment on Sunrise gas

Woodside Petroleum has called for a resolution between Australia and East Timor of the renewed uncertainty over the administration of the Sunrise gas resource in the Timor Sea as it seeks to break the stalemate around its long-stalled $US13 billion ($17 billion) Sunrise gas project, according to the Australian Financial Review.

Woodside said settling the issues around the management of the Sunrise resource “would provide more certainty to investors and could potentially advance the development of Greater Sunrise”

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