News Wrap

IN THIS morning’s News Wrap: Coal plant closure scheme a solution to Paris promises; Commodities rout to continue, says Citrine's Crone; and Work capital management key as dividends put pressure on miners' cash.

Lou Caruana

Coal plant closure scheme a solution to Paris promises

An innovative proposal from Australian National University Associate Professor Frank Jotzo for an industry-funded coal fired power plant closure scheme appears to be gaining support, according to the Australian Financial Review.

Jotzo, director of the ANU's Centre for Climate Economics and Policy, puts the case for a funded scheme to drive the closure of one or two plants. The argument is that with a plant shutdown increasingly likely in any case, and in the absence of a carbon price, such a scheme is required to ensure the most carbon-intensive capacity – one of Victoria's brown coal-fired plants – is closed rather than a higher-cost but cleaner black coal one.

Commodities rout to continue, says Citrine's Crone

Citrine Capital Management believes the biggest rout in industrial metals since the financial crisis is set to deepen as mining companies fail to cut production enough to make up for slowing demand, according to the Australian Financial Review.

“We could make fresh multi-year lows across metals in the next six months,” founder of Citrine Paul Crone said.

Work capital management key as dividends put pressure on miners' cash

The Sydney Morning Herald reports the world's biggest mining companies could do more to manage working capital to unlock the cash needed to meet demanding dividend commitments, according to a new report on the industry.

The EY report released Friday revealed the cash conversion cycle for the world's 80 largest mining companies averaged 38 days in 2014, a reduction of just one day compared to 2013, with the iron ore sector displaying the lowest levels at just 23 days.

The report said divergences between the performances of different commodity groups were expected to widen over the next few years as prices continued to fluctuate.

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