News Wrap

IN THIS morning’s wrap: GVK chief hails mine approval process; contractors see tougher times ahead; and BHP coking coal exports hit by lower demand.
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Shiploader landing at Abbot Point.

Lou Caruana

GVK chief hails mine approval process

The approval of the $A6 billion Alpha mine, a joint venture between India’s GVK and Gina Rinehart’s Hancock Coal, has increased confidence in Australia’s regulatory system, says GVK chairman Sanjay Reddy in the Australian Financial Review.

One of India’s leading young entrepreneurs, Reddy declared Australia to be his “second home” as he shifted into the financing stage of the project in Queensland’s burgeoning Galilee Basin, which could be the flagship of a new economic relationship with his country.

Reddy has visited Australia 27 times in the past two years and is convinced that the long-standing economic and political gap between the two countries can be bridged with the demonstration that business opportunities are happening.

Contractors see tougher times ahead

JPMorgan’s latest measurement of sentiment among small and large contractors makes for depressing reading for the sector, according to the Australian Financial Review.

Its index shows expectations of both profit margins and forward order books have slumped by 30% in just six months as delays and cancellations by major miners filter through to the service companies.

Hopes that the drop-off in project activity might lead to an easing of the chronic labour shortages which have blighted the sector also appear to have been dashed.

The peak of the boom may be over, but around $200 billion of committed projects means there’s still plenty of heat left in the market.

BHP coking coal exports hit by lower demand

BHP Billiton is poised to report weak shipments from its Queensland coking coal division in the September quarter despite an end to long-running industrial action at several mines during the period, according to the Australian Financial Review.

Reasons for the decline include falling demand for the product and the closure of the small, high-cost Norwich Park mine in May.

Exports from the Hay Point port solely used by the BHP Billiton Mitsubishi Alliance (BMA) fell 10% in the September quarter against the June quarter, even though there was no industrial action from July 6, when a framework agreement was reached with unions.

In total, 6.7 million tonnes of coal was exported from Hay Point in the September quarter, which was 23% lower than the same period last year when BMA was still recovering from flooding at its mines.

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