News Wrap

IN THIS morning’s News Wrap: Big engineering projects near peak, says BIS Shrapnel; Labor pushes ahead with 457 visa changes; and Rio could reap $1 billion from Diavik sale.

Lou Caruana

Big engineering projects near peak, says BIS Shrapnel

Industry forecaster BIS Shrapnel says contractors will need to focus increasingly on maintenance work and smaller sub-sectors to grow their businesses because engineering construction in Australia is expected to peak this year, according to the Australian Financial Review.

Adrian Hart, the senior manager for BIS Shrapnel’s infrastructure and mining business, said that 12-18 months ago he had expected engineering construction to peak in 2015. But the cancellation of several mining projects in the second half of last year – most notably BHP Billiton’s planned $US20 billion-plus Olympic Dam expansion – had moved the projected peak forward.

Emeco, Calibre Group and Ausdrill are among the listed mining services groups which have downgraded their profit guidance this month, while Aethon pulled an $80 million float.

Labor pushes ahead with 457 visa changes

The Gillard government will seek to legislate changes to the 457 temporary skilled migration visa scheme before Parliament rises in June, as it releases a new report which suggests there are question marks over thousands of 457 applications a year, according to the Australian Financial Review.

Immigration Minister Brendan O’Connor said on Sunday that the government would seek to introduce legislation to reform the 457 system – which the government says is being abused – during budget week, with the aim of the bill passing both houses of Parliament by the end of June.

The question of exactly which of the government’s changes will be legislated is still being finalised but could include provisions strengthening the requirement for shortages and jobs to be genuine and for employers to demonstrate their commitment to training local workers.

Rio could reap $1B from Diavik sale

Rio Tinto could soon rake in more than $US1 billion from the sale of its Diavik diamond mine in Canada, with the most likely buyer suggesting a deal might be struck by the end of June, according to the Australian Financial Review.

The potential sale of the 60% stake in Diavik to the miner’s joint venture partner, Canadian-listed Dominion Diamond Corp, comes after Rio’s largest independent shareholder BlackRock last week urged the miner to be pragmatic about the prices achieved in its asset sales program.

Rio expects to achieve “significant cash proceeds” from asset sales this year as part of a quest to retain its A-minus credit rating, now on negative watch.

Rio announced the potential sale of its diamonds division in March 2012 but has yet to sell any assets. Diavik is expected to be the most valuable.