News Wrap

IN THIS morning’s News Wrap: Business must help productivity reform, says Rio; plans for Extension Hill iron ore mine proceeding well, says Guo; and Rio reports of good progress in Oyu Tolgoi talks.

Lou Caruana

Business must help productivity reform, says Rio

Rio Tinto chairman Jan du Plessis has called Australian businesses to shoulder some of the heavy lifting to boost productivity and encourage reform, according to the Australian Financial Review.

Du Plessis also backed the removal of the carbon tax and remains in discussions over implementing the Coalition’s Direct Action policy.

Speaking at the Australian British Chamber of Commerce event in Sydney on Friday, du Plessis said he had been encouraged by early signs from the federal government, but urged companies to identify and explain solutions for Australia’s waning productivity.

He said Australia was not as competitive due to its higher operating costs as a result of the strong dollar.

“Business has to be prepared to do some of the heavy lifting on the policy reform front. It can’t all be left to government,” he said.

“Business has a role to play in lucidly explaining the benefits of the reform process to the broader community. Business leaders, like many of you in this room, should be prepared to stand up and argue the case about why change is needed.”

Plans for Extension Hill iron ore mine proceeding well, says Guo

A senior steel executive says the $US3 billion ($A3.26 billion) Extension Hill iron ore mine and refinery in Western Australia will proceed, the AFR reports.

The executive, Deyong Guo, denied recent reports that expressed doubt the project would go ahead after the replacement of a senior Australia-based executive.

Guo told Australian journalists a decision on the investment in the project would be made in October next year and he was confident it would be approved. The project will take about three years to complete.

He spoke following a tour of the massive Chongqing Iron and Steel Group plant, which opened in 2011 and cost $US5.3 billion. It produces about 8.5 million tonnes of steel annually from about 15 million tonnes of iron ore, about half of which comes from Australia.

Rio reports ‘good progress’ in Oyu Tolgoi talks

Rio Tinto chairman Jan du Plessis said the global resources company was making “good progress” in its negotiations with the Mongolian government over the financing required to develop the second stage of its massive Oyu Tolgoi copper mine, according to the AFR.

The comments follow Rio’s majority-owned Turquoise Hill Resources delaying work at the Mongolian mine and launching a multi-billion dollar rights issue after financing arrangement talks with the government failed.

The development of the underground stage of the $US6.2 billion Oyu Tolgoi mine has been delayed after it emerged the required project financing needed to be approved by the Mongolian government.