News Wrap

IN THIS morning’s News Wrap: Rio Tinto stops hiring in bid to cut costs; Bell Potter's Charlie Aitken tips Australian dollar to fall below US68c; and NSW government tips in extra $A23M to monitor water amid coal, CSG fears.

Kristie Batten

Rio Tinto stops hiring in bid to cut costs

Rio Tinto has slapped a hiring freeze on its iron ore workforce and warned of a "degree of urgency" to quickly achieve deep cost cuts, reports The Australian Financial Review.

Rio iron ore boss Andrew Harding sent a memo to staff this month detailing how aggressive cost cuts would be executed across the division, and stressed the importance of the miner maintaining its mantle as the lowest-cost producer in the Pilbara.

"The scenario for 2015 and beyond reinforces the absolute need for us to maintain our position as the lowest-cost producer, particularly when compared with other Pilbara producers," Harding wrote in the note sent to staff last week.

"To maintain favourable cash cost earnings, we must substantially and quickly decrease our operating costs. We also cannot let go of tonnes, both new and incremental."

The cost-cutting story at Rio is not new. Harding's hard line on costs follows hot on the heels of a warning from Rio chief executive Sam Walsh to all staff in January, in which he flagged further cost-cutting.

Bell Potter's Charlie Aitken tips Australian dollar to fall below US68c

Bell Potter analyst Charlie Aitken has forecast an Australian dollar at US68c, interest rates below 2%, and a stock market at 6000 after radically revising his predictions, according to The Age.

"Both the Baltic Dry Index and RBA cash rate are below levels seen at the peak of the GFC," he told clients on Wednesday morning.

"I now believe it's only a matter of time before the Australian-US dollar cross rate re-correlates to global financial levels.

"On that basis this morning I am downgrading my medium-term Australian dollar price target from 75c to 68c."

Aitken also said the Reserve Bank cash rate would likely fall below 2%.

"However, against a global backdrop of deflationary forces and competitive currency devaluations, I think there is very real possibility of the cash rate with a '1' handle at some stage over the next 12-18 months," he said.

NSW government tips in extra $23M to monitor water amid coal, CSG fears

The Sydney Morning Herald reports that the New South Wales government plans to spend an extra $23 million to improve water mapping and monitoring in the state and help douse community disquiet over major mining projects.

The NSW Office of Water will use the additional funds, to be spent over the next five years, to install a further 70 groundwater monitoring bores in priority areas such as the Gloucester, Gunnedah and Clarence Morton basins.

"Water is the lifeblood of communities across the state and that is why the NSW government is gathering the information we need to make decisions that ensure our water resources are protected," NSW Minister for Water, Lands and Natural Resources Kevin Humphries said.

"While the groundwater monitoring has historically focused on water levels and pressures, this monitoring will be expanded to include water quality information at many more sites across NSW.”

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