News Wrap

IN THIS morning’s News Wrap: Forecasting further capex decline; Simandou spending shift tipped; and the housing industry calls for mining money.
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Justin Niessner

Forecasting further capex decline

Danish engineering company FLSmidth has projected that world mining companies will continue to cut spending this year and in 2014, reducing demand among equipment makers, according to Reuters.

FLSmidth chief executive Thomas Schulz described the downturn as part of a normal 10-year business cycle started last year, predicting mining capex would bottom out toward the end of next year.

The report noted, however, that the operational cost side of the mining industry was developing well and FLSmidth ‘s equipment maintenance business had increased its order intake by 21% over the second quarter.

Simandou spending shift tipped

China is reportedly shifting its stake in Rio Tinto’s massive Simandou iron ore project in Guinea, Africa, from Hong Kong-listed Chalco to the unlisted state-owned company Chinalco.

According to The Australian, the transfer could indicate the parties are gearing up to start significant spending with Chalco saying in a recent statement that the move was being pursued to reduce the call on cash from the listed entity.

Simandou is targeting production start-up in 2018.

Housing industry calls for mining money

The ABC reports the Housing Industry Association is renewing calls for the mining sector to contribute to a construction workers’ training fund.

The residential building organisation is expected to write the Western Australian government to press for a levy on the mining industry as the sector is likely to eventually recruit workers trained by the fund.

"A lot of these workers are working and trained within the housing industry," HIA spokesman John Gelavis was quoted as saying.

"And, when the resource industry comes back online, a lot of these workers that were trained within the housing industry will move to the resources industry."

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