Three of the world’s biggest miners have warned that government taxes, high costs and a strong currency are putting pressure on their Australian operations, reports said yesterday, as they battle falling commodity prices owing to a supply glut.
Heavyweights BHP Billiton Ltd and Rio Tinto PLC said the high costs were placing a “vice-like grip” on the coal industry and could lead to more mine closures and job cuts, the Australian Financial Review reported.
Their warnings came as the world’s biggest aluminum producer, Russia’s Rusal, said that domestic investment conditions in the sector were “extraordinarily difficult.”
Australia’s mining sector has been belt-tightening, winding back or shutting operations and slashing thousands of jobs as the Asia-led mining investment boom cools.
Swiss giant Glencore Xstrata PLC said last week that it would close its Newlands underground coal mine in central Queensland State with the loss of about 200 jobs by the end of next year, adding to previous cuts last year.
The slide in coal prices also saw Integra, a subsidiary of Brazilian mining powerhouse Vale SA, announce in the middle of the month a suspension of work at two mines in New South Wales.
Rio’s chief executive for energy Harry Kenyon-Slaney said his company’s leadership team was “prepared to kill sacred cows,” such as freezing salary rises as part of its cost-cutting drive.
“Quite a lot of projects that had considerable noise around them over [the] last three or four years have gone quiet,” he told the Financial Review. “The economic reality is that it is going to be quite hard to find financing for big coal projects.”
Rusal said Australia’s high cost of construction and a stubbornly high exchange rate were putting future investment at risk.
“The industry in Australia is faced with development hurdles that pose significant obstacles for investment,” Rusal’s Australian chairman John Hannagan told the Australian broadsheet.
He added that frustration with Australia’s investment climate had prompted the firm to turn its attention to Indonesia, where it is looking into bauxite and alumina opportunities despite the country’s recent ban on exporting unprocessed bauxite.
“While there is still some uncertainty around aspects of the new policy we would expect greater clarity after the 2014 Indonesian elections are completed,” Hannagan said.
Indonesia holds its presidential election in July.
“This new development means that Australia will compete directly with Indonesia as their bauxite-alumina policy matures,” he added.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by