News Wrap

IN THIS morning’s News Wrap: Australia’s position ‘enviable’; BHP shareholders urge caution on potash development; and Lynas gets first pay cheque.

Staff Reporter

Australia’s position ‘enviable’

One of the world's foremost economists has given his backing to Australia's economic management through the financial crisis, saying Australia remains the envy of the advanced economic world, despite its “luxury problems”, according to the Sydney Morning Herald.

Professor Willem Buiter, a former chief economist for the European Bank for reconstruction and development, is in Australia this week on a rare visit.

Buiter – who has also advised the World Bank, International Monetary Fund, and Asian Development Bank – praised Australia's economic managers, saying the country had enough monetary and fiscal “'ammunition” to handle another adverse economic shock, unlike other economies.

BHP shareholders urge caution on potash development

BHP Billiton is facing mounting shareholder pressure to take a “conservative” approach and delay the development of its $US15 billion Jansen Potash project after a major structural change in the market that is expected to force potash prices lower, according to the Australian Financial Review.

The BHP board is expected to update the market on whether it will invest further funds into the development of its well-regarded Canadian-based potash resource of 3 billion metric tons across approximately 14, at its full-year results on August 20.

BHP chief executive Andrew Mackenzie said its potash development remained “a great option, but just an option” in a speech in June.

Lynas gets first pay cheque

Australian rare earths miner Lynas has had a troubled history, but has its first pay cheque in hand after posting a maiden revenue report, according to the Sydney Morning Herald.

Lynas sold 117 tonnes of product out of its newly commissioned Malaysian refinery for $600,000 during the three months to the end of June.

The sales revenue was modest, but the company is at least making money after struggling to get an operating licence, due to ongoing lawsuits and political problems involving opposition from local and foreign environmentalists.

The quarterly revenue represents just $5.10/kg, compared to an estimated current price of about $29/kg with Lynas' cost guidance at $14-$15/kg for 22,000 tonnes a year of production.