News Wrap

IN THIS morning’s News Wrap: Gloucester council opposes AGL's coal-seam gas venture; BHP Billiton CEO, chairman may have to resign if dividend policy maintained; and iron ore may extend rout into 2016, says ex-Rio economist.

Lou Caruana

Gloucester council opposes AGL's coal-seam gas venture

AGL's coal-seam gas project planned for Gloucester in New South Wales has suffered another setback, with the local shire council calling on the state government to buy back the energy giant's licence, according to the Sydney Morning Herald.

Gloucester Shire Council members voted 6-1 on Wednesday to back a motion rejecting the project, saying it was damaging the “social fabric” of the mid-north coast community.

BHP Billiton CEO, chairman may have to resign if dividend policy maintained

Shareholders attending BHP Billiton's annual meeting in Perth on Thursday are likely to question the board relentlessly about the Brazilian dam disaster and the implication for growth of the planned reduction in capital expenditure, according to the Australian Financial Review.

But many individual investors are expected to focus their attention on the mining behemoth's commitment to the so-called progressive dividend policy, or the promise to “steadily increase or at least maintain the dividend per share in US dollar terms” at each financial half year.

Iron ore may extend rout into 2016, says ex-Rio economist

Iron ore will extend declines into 2016 as weakening steel output hurts demand while the world's biggest suppliers raise production further, according to a former chief economist at Rio Tinto Group, who said China would do well to demolish unneeded mills, according to the Australian Financial Review.

“There's about 300 million tons of surplus capacity in China that needs to be not just shut down, it needs to be eradicated, it needs to be bulldozed,” David Humphreys, who held the title at Rio for eight years to 2004, said in a phone interview. Steel “production needs to fall,” said Humphreys, 63, who is now an independent consultant.

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