News Wrap

IN THIS morning’s news wrap: China becoming price setter; Bumi shares slump; and South African wage woes spread.
News Wrap News Wrap News Wrap News Wrap News Wrap

 

Staff Reporter

China price

China is fast becoming a thermal coal price setter, overtaking Japan as the world’s largest importer of the fuel last year, The Australian reports.

This means any change in how China markets the commodity will create waves in coal exporting countries – such as Australia and Indonesia. Together, Australia and Indonesia supplied more than half of China’s 150 million tonnes of coal imports in the first eight months of this year.

China is a power hungry nation. It has made big inroads into renewable energy, but coal still provides more than two-thirds of its needs.

The Australian quotes Chinese media as saying the nation’s cabinet is considering a proposal from the National Development and Reform Commission that would allow state-owned miners more freedom to negotiate coal supply and prices with power generators such as Huaneng Group and China Resources Power.

Bumi probe

Bumi, the London-listed coal miner part-owned by Indonesia’s influential Bakrie family, has launched an investigation into potential financial irregularities at its subsidiaries, sending its shares tumbling 30%, Reuters reports.

The company, co-founded by British-born financier Nat Rothschild, said it commissioned an independent investigation following allegations concerning the use of company funds at its affiliates, including the 29%-owned PT Bumi Resources, which is Asia’s largest thermal coal exporter.

The inquiry into what Bumi called “potential financial and other irregularities” will be led by an as-yet-unnamed law firm.

PT Bumi chief executive officer Ari Hudaya stepped down from the board hours after the probe was announced.

The inquiry is expected to include a close look at some $300 million of funds earmarked for the development of new projects.

One area of focus is said to be the “extensive” development funds of PT Bumi, most of which were written down to zero at the end of last year, along with one potential mining project held by another subsidiary, PT Berau Coal Energy.

South African wage pain

Signs are growing that the wages dispute which led to the shooting tragedy at Lonmin’s Marikana mine is spreading to other companies and commodities in the mining sector.

The unrest has spread to affect companies such as Anglo American, Xstrata and Gold Fields, the Financial Times reports.

Initial hopes that wage demands and protests would be contained to the platinum sector have been dashed, the FT says, with Gold Fields also hit by an unlawful strike of 15,000 workers at its KDC mine.

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