News Wrap

IN THIS morning’s News Wrap: Forrest has high hopes for China forum; Delacy warns that coal mining faces perfect storm; and Ian Plimer warned Ian Macdonald of mine madness.

Staff Reporter

Forrest has high hopes for China forum

The chairman of Fortescue Metals Group, Andrew Forrest, is leading a group of senior business leaders to China today in a major attempt to make up for the lack of high-level effort put into the bilateral relationship over the past several years, the Australian Financial Review reports.

But Forrest said he applauded Prime Minister Julia Gillard for her “timely and necessary’’ trip to China, which starts today.

Three separate business delegations will accompany Gillard on her five-day trip, which is being billed as the most senior government grouping to ever visit China.

The business delegation, which numbers nearly 150, includes transport mogul Lindsay Fox, Westpac chief executive Gail Kelly, National Australia Bank chairman Michael Chaney and Forrest.

Coal mining facing perfect storm, says Delacy

Former Macarthur Coal chairman Keith DeLacy says the coal industry faces a “perfect storm” of factors conspiring to create tough conditions for aspiring and producing miners alike, according to the Australian Financial Review.

“You’ve got the shale gas in the US replacing coal, you’ve got a lot of pressure particularly on thermal coal, as well as the international economy putting downward pressure on coal, but at the same time there’s been an enormous increase in costs over the last five years,” DeLacy said.

He admits there is a range of reasons for the sector’s current predicament, including intense competition for raw material inputs that has forced prices for labour and equipment sharply higher, and a lack of focus on productivity.

“I think to a certain extent management may have taken their eyes off the ball in the chase for high prices but there’s no doubt in my mind that what’s driving the enormous increase in costs is the regulatory burden,” he said.

“Over the last five or 10 years it’s just extraordinary what’s happened there.”

Ian Plimer warned Ian Macdonald of mine madness

Academic and prominent climate change sceptic Ian Plimer warned former NSW mining minister Ian Macdonald and a union leader that the idea of a controversial training mine was "absolute madness" and would endanger the lives of students, The Australian reports.

Professor Plimer, who had a long association with the University of Newcastle, gave evidence to the Independent Commission Against Corruption in Sydney yesterday, outlining his objections to the Doyles Creek mine in the NSW Hunter Valley that was approved by Macdonald and partly owned by a close associate, John Maitland.