News Wrap

IN THIS morning’s News Wrap: workers plead for Rio extension to keep Warkworth mine open; weakening prices put pressure on Rio and Fortescue; and Leighton stops work at Indonesian coal mines.

Staff Reporter

Workers plead for Rio extension to keep Warkworth mine open

More than 1500 workers, contractors and suppliers have pleaded with the New South Wales government to fix its planning system and support policies to keep Rio Tinto's Warkworth coal mine open, according to The Australian.

The Hunter Valley workers and their families signed a petition, tabled in state Parliament this week, highlighting fears their livelihoods would be hit if a court decision to stop the expansion of the mine was not overturned.

Rio subsidiary Coal & Allied acting managing director Darren Yeates said the petition showed the effect on families if the Warkworth extension did not proceed.

“We're doing everything we can to maintain production levels and prevent unnecessary job losses but unfortunately the situation continues to grow more serious with each passing day,” he said.

Weakening prices put pressure on Rio and Fortescue

The falling iron ore price is expected to heap pressure on expansion and deal-making activity by two of Australia’s biggest producers, Rio Tinto and Fortescue Metals Group, amid expectations the price will weaken further, according to the Australian Financial Review.

Chinese steel mill destocking, poor weather in southern China and lower demand for steel product has been blamed for driving the spot iron ore price lower for the seventh consecutive week to $US111.60 a tonne, according to The Steel Index.

The price for the commodity, predominantly used in the production of steel, has dropped 29% since its 12-month high of $160 a tonne in February.

Leighton stops work at Indonesian coal mines

Contractor Leighton Holdings said workers at two of its key Indonesian coal contracts stopped work more than a month ago in a dispute with mine owner Bumi Resources, according to the Australian Financial Review.

Leighton shares closed down 4.9% at $17.59 on Friday after it confirmed market speculation it was having problems recovering money owed for contracting work at the Senakin and Satui thermal coal mines in South Kalimantan.

Leighton said it had suspended operations at both mines, which contributed around $347 million of 2012 group revenues, on April 26.

The contractor is pursuing an undisclosed sum of money from Bumi Resources, which owns the mines through its PT Arutmin subsidiary, which was formerly owned by BHP.

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