News Wrap

IN THIS morning’s News Wrap: Wesfarmers' Goyder predicts M&A in metallurgical coal; Rio Tinto loses test case against ATO; and Mineral Resources reveals monorail ambitions.

Lou Caruana

Wesfarmers' Goyder predicts M&A in metallurgical coal

Wesfarmers managing director Richard Goyder said mergers and acquisitions in Australia's troubled metallurgical coal sector were “inevitable”, and his coal executives said heavily depressed prices appear to be “bouncing along the bottom”, according to the Australian Financial Review.

The Perth-based conglomerate recorded a 41% fall in EBIT on Thursday for its coal division to $35 million in the December half, from $59 million the previous year, despite a 4% increase in production.

Goyder said mergers and acquisition were “almost inevitable because at current metallurgical coal pricing we think quite a few mines will be cash-negative”

Rio Tinto loses test case against ATO

Rio Tinto has lost a test case against the Australian Taxation Office over the claiming of GST credits for housing it builds for workers in remote locations, according to the Sydney Morning Herald.

In a Federal Court decision that could protect hundreds of millions of dollars in revenue, Justice Jennifer Davies on Thursday said the mining giant will not be eligible to claim more than $600,000 in tax credits for its remote housing costs in the Pilbara region of Western Australia, after it lost its long-running battle against the tax commissioner.

The ATO has always viewed such housing as residential and without GST and the case is seen as important because other miners and businesses were expected to follow Rio Tinto's lead in claiming the refunds.

Mineral Resources reveals monorail ambitions

Mineral Resources managing director Chris Ellison said the company was looking to move away from iron ore mining and reinvent itself as a pure mining services company with the construction of a monorail in the Pilbara, according to the Sydney Morning Herald.

Ellison said the company had patented its own elevated rail system, being designed in China, and hoped to begin the construction of a line from Port Hedland port to BC Iron's Iron Valley mine in late December.