News Wrap

IN THIS morning’s News Wrap: thermal coal contract price settled at $US95 a tonne; Rio shortlisted on Mozambique tender; and mining council says tax grab puts jobs at risk.

Staff Reporter

Thermal coal contract price settled at $US95 a tonne

The benchmark Japanese fiscal year thermal coal contract price has been settled at $US95 a tonne, 17% lower than the $115/t price agreed last year, according to the Australian Financial Review.

UBS analyst Tom Price said the settlement, agreed between Xstrata and Japanese utility Tohuku, had been made at the mid-point of the negotiating range.

Xstrata had been seeking $100/t and Tohuku was looking for $90/t, given the spot price of thermal coal is trading at $89/t.

The high Australian dollar, carbon tax and fees for excess infrastructure mean many local mines are only marginally cashflow positive at the $95/t price.

Rio shortlisted on Mozambique tender

Rio Tinto is on the Mozambique government’s shortlist to develop $3 billion-plus of open access rail and port infrastructure to be used by coal miners in the African nation, according to the Australian Financial Review.

The miner took part in a government tender process that this week reportedly whittled the number of proponents down from 21 to six, despite its recent $2.9 billion of writedowns on its Mozambique coal assets.

The impairments, which equated to 70% of the $4.2 billion Rio paid for its acquisition of Riversdale Mining in 2011, led to the departure of chief executive Tom Albanese and strategy head Doug Ritchie in January.

Mining council says tax grab puts jobs at risk

The peak mining industry body of New South Wales has called on the state government to keep any "surprise" new fees out of its budget, warning that an increase in taxes will put jobs at risk and see investment go offshore, according to The Australian.

The NSW Minerals Council complained that the previous budget included new annual fees and charges on mining which it said hit the sector at a time of low commodity prices and increasing costs.