News Wrap

IN THIS morning’s News Wrap: China concerns shift from coal to credit; Whitehaven boss reckons Chinese coal tariffs will play to Australia’s strengths; and Rio Tinto withholds $US4.2 billion for Mongolian copper venture.

Lou Caruana

China concerns shift from coal to credit

Tariffs on Australian coal exported to China will be abolished once a free-trade agreement is reached, as Treasurer Joe Hockey warned Australia must prepare for any short-term pain from Beijing’s efforts to deflate the country’s “housing bubble”, according to the Australian Financial Review.

Hockey, who is in Beijing to attend a meeting of regional finance ministers, said China must inevitably tighten credit, a move that will be felt in Australia which relies on the world’s second-biggest economy for nearly a third of exports.

“Obviously there is a housing bubble here [in China] that is coming off, that will create some ripples through the economy,” he said.

Whitehaven boss reckons Chinese coal tariffs will play to Australia’s strengths

Whitehaven Coal chief executive Paul Flynn insists that tightening regulations in China and elsewhere around the world on coal quality and imports will actually suit Australia, especially mines in NSW’s Gunnedah Basin, because of the high-quality coal that they produce, according to the Sydney Morning Herald.

Flynn said coal importers around the world would “start to change their historical path, which has been purely price driven and burning lower-quality coals, and they will start to enrich their blends with higher-quality coals out of Australia”

Flynn said he expected the Australian government to make the coal tariff issue a major point in final negotiations on the free trade agreement with China.

“I think the government has got the bit between the teeth on this one,” Flynn said.

Rio Tinto has withheld $US4.2 billion for Mongolian copper venture

Rio Tinto is leaving $US4.2 billion in financing needed to move forward its troubled Oyu Tolgoi project in limbo until the miner can get greater clarity from the Mongolian government, according to the Sydney Morning Herald.

Rio copper boss Jean-Sebastien Jacques said the miner had not requested a formal extension to a lapsed deadline for project financing because the ball was in the Mongolian government’s court.

“Either they want to do it or they don't want to do it,” he said. “If they want to do it, we can move with pace, but it is really their call now.”