News Wrap

IN THIS Morning’s News Wrap: Energy subsidies top $6.6 trillion; Rio Tinto's Mongolian copper mining dream lives on, but at a cost; and Brazil set to profit from Andrew Forrest's iron ore vendetta.

Lou Caruana

Energy subsidies top $6.6 trillion

Researchers at the International Monetary Fund believe the world subsidises energy consumption to the tune of more than $200,000 per second, with about 60% of that going to support coal, according to the Sydney Morning Herald.

In a paper published by the IMF, the authors found that energy subsidies were much more than previously estimated. These will rise to $US5.3 trillion ($6.6 trillion) in 2015, or about 6.5% of total global output.

For some nations, such as in the former Soviet Union and Pakistan, the subsidies approach 18% of GDP.

Rio Tinto's Mongolian copper mining dream lives on, but at a cost

Rio Tinto's most important growth asset has taken a major step toward development, after the Mongolian government agreed to a $US148 million settlement that will allow a $US5.4 billion expansion of the Oyu Tolgoi copper mine to go ahead, according to the Australian Financial Review.

Ending an impasse that has lasted for close to three years, Rio and its subsidiaries agreed to pay a $US30 million tax claim, backpay 10 months worth of royalties to the Mongolian government and cede control of a lucrative smelter royalty in return for permission to push ahead with the expansion, which is considered to contain about 80% of Oyu Tolgoi's value.

Brazil set to profit from Andrew Forrest's iron ore vendetta

Fortescue Metals Group chairman Andrew Forrest's rivals believe he is edging ever closer to scoring a spectacular own-goal for Australia against the Brazilians – the true opponent in the iron ore wars that have so far been exempt from the billionaire's campaign, according to the Sydney Morning Herald.

Brazil's Vale is set to unleash a wall of new iron ore supply on to the market from next year, far greater than the combined new production of Rio Tinto and BHP Billiton due to come on to the market.

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