News Wrap

IN News Wrap: Budget boost could help controversial Galilee coal projects; Xenophon negotiating with Joe Hockey over iron ore inquiry; and private equity ready for mining M&A as activity hits a low.

Lou Caruana

Budget boost could help controversial Galilee coal projects

Coal projects in the Galilee Basin and on the door step of the Great Barrier Reef could receive government financing under a $A5 billion loan scheme in the federal budget, according to the Sydney Morning Herald.

But companies would have to demonstrate their projects would not be commercially viable without government funding to be eligible, the Abbott government has said.

Xenophon negotiating with Joe Hockey over iron ore inquiry

The iron ore industry is likely to face a Liberal-led parliamentary inquiry after Rio Tinto's Australian managing director, Phil Edmands, mounted an 11th hour bid to kill a Senate inquiry proposed by an ally of Fortescue Metals Group chairman Andrew Forrest, Senator Nick Xenophon, according to the Australian Financial Review.

Xenophon, who accused the big miners of conducting a “furious campaign” against his planned inquiry, on Thursday failed to get enough support for his own inquiry in the Senate.

He is now negotiating with Treasurer Joe Hockey’s office over the establishment of a one-off committee to examine the issue with MPs from both houses of Parliament that would be headed by a Liberal MP.

Private equity ready for mining M&A as activity hits a low

The level of mergers and acquisitions in the mining industry is continuing to plunge, but advisers are betting the nadir is near and a brightening outlook for base metals could help spur a recovery, according to the Australian Financial Review.

Ernst & Young transactions partner Paul Murphy said the huge pool of private equity money earmarked for mining assets could find a home in base metals, but was only likely to be deployed at the “very last minute” when there were clear signs of a price uptick.

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