News Wrap

IN THIS morning’s News Wrap: World Bank cuts growth outlook; Chinese miners on hunt as gold price retreats; and Guinea minister raises concerns on Simandou costs

Staff Reporter

World Bank cuts growth outlook

The World Bank has cut its outlook for global growth, saying the economy should expand more slowly this year than last as it cited a deeper than expected recession in Europe and a recent slowdown in some emerging markets, according to the Sydney Morning Herald.

In its twice-yearly Global Economic Prospects report, the bank warned that large developing economies, which had driven global growth in recent years, would not experience the same boom as they did before the global financial crisis and would have to focus on structural reforms to keep expanding.

The bank forecast the world's gross domestic product would grow 2.2% this year, slightly below last year's growth of 2.3%. In its last forecast in January, the World Bank estimated the world economy would expand 2.4% this year.

Chinese miners on hunt as gold price retreats

China is growing more interested in Australian gold assets as prices slide, according to The Australian.

Aphrodite Gold, which, like most junior miners, is being forced to seek funds outside troubled equity markets, is in talks with Shandong Gold and other Chinese parties to sell up to a 50% stake in the Aphrodite project 65km north of Kalgoorlie.

Shandong last year bought a 49% stake in Focus Minerals, which operates in the nearby town of Coolgardie, and the Chinese miner is considered a potential buyer of Alacer Gold's Australian assets, which went on the block yesterday.

Guinea minister raises concerns on Simandou costs

Guinea’s mines minister Mohamed Lamine Fofana has sparked fresh alarm over Rio Tinto’s troubled Simandou iron ore project after claiming its budget may have doubled to $20 billion amid potential delays to the development.

Speaking in London as part of a government delegation ahead of the G8 summit, Fofana said production at Rio’s iron ore mining project in southeast Guinea had been delayed and costs were escalating.

“In 2011, the first date of production agreed with Rio was 2015.

Today, the reality is this cannot be respected,” Fofana told investors in London.

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