BHP pricing tweak reaps $US7 billion for Australia
A new study shows that changes to the way iron ore is priced cost Chinese importers about $US444 million ($A467.7 million) a month in the first 1.5 years of the system, according to The Australian.
The campaign led by BHP Billiton to replace the benchmark system with spot market pricing was equivalent to a price increase of 7.1% and added $US7.1 billion to Australian exporter revenues, according to the study by Australian National University researcher Luke Hurst.
The study covered the period from April 2010, when the system was introduced, to December 2011.
By shifting freight costs to the producer, it also enabled Australian exporters to reclaim the cost advantage they hold over Brazil because of their proximity to the Chinese market.
Aurizon looks to Pilbara rail and port operations
Rail group Aurizon has confirmed its interest in operating port and rail facilities in the Pilbara as it pushes ahead with the development of its Western Australian iron ore business, according to the Australian Financial Review.
The feasibility study Aurizon undertook with Brockman Resources and Atlas Iron to assess the merits of a multi-user railway in the Pilbara highlighted value in integrating rail and port to achieve “alignment and efficiency across the supply chain”, a company spokesman said.
“Aurizon continues to discuss the proposal with a range of parties including the Western Australian government,” it said.
WA Premier Colin Barnett, who oversees the state development portfolio, declined to comment.
Bradken settles Norcast court dispute
Engineering group Bradken has settled a legal dispute with the former owners of Canadian steel foundry Norcast after the full Federal Court set aside declarations that the company, chairman Nick Greiner and chief executive Brian Hodges had engaged in anti-competitive and deceptive conduct, according to the Australian Financial Review.
Bradken and Switzerland’s Pala Investments had agreed to a settlement over the matter, which related to the “quick-flip” sale of Norcast by private equity firm Castle Harlan to Bradken just hours after buying the business from Pala in 2011.
However, Bradken first wanted the court to wipe from the case books findings that the company, Greiner and Hodges had colluded with Castle Harlan during the Norcast sale. In a statement to the market yesterday, Bradken indicated that had taken place.
“The full board of Bradken is pleased to announce that Bradken and two of its directors, Brian Hodges and Nicholas Greiner, have resolved their dispute with Norcast in the Federal Court of Australia on confidential commercial terms, with an undisclosed settlements amount being paid to Norcast,” the company said.