Spot iron ore $US110 a tonne compared with the Australian contract price of $US52 a tonne; crude oil continues to trade above $US80 a barrel: analysts predict contract price rises up to 40pc for iron ore in 2008-09

Spot iron ore [Indian spot at port India, free on board] was trading at more than $US110 a tonne, compared with the Australian contract price of $US52 a tonne, according to Stephen Wyatt in Shanghai, writing in The Australian Financial Review, (8/10/2007, p. 23).

Rowsthorn set to leverage Pacific National rail business into Qld coal industry, busting open Qld Rail’s cosy little rail monopoly by signing up two customers, Xstrata and Rio Tinto

Rowsthorn was about to leverage the Pacific National rail business into the Queensland coal industry, busting open Queensland Rail’s cosy little rail monopoly, by signing up two customers, Xstrata and Rio Tinto, to transport coal from their mines to the ports, reported Adele Ferguson in The Australian (10/9/2007, p.36).

Value of Australian thermal coal exports in 2006-07 $6.8 billion; 6 per cent fall from 2005-06, as Australian dollar rises against US dollar

Private ownership of coal ports – owner wants to spend up, to boost shareholder returns, while the user wants to restrict spending to get the cheapest port charges

Leo Zussino, who ran the Port of Gladstone, and Peter Coates of Xstrata Coal would be working closely together in the next few years if Queensland’s Surat Basin coal province was opened up as a major source of exports – but they would have to agree to disagree on one thing, according to The Courier Mail (7/8/2007), p. 61).

Fed Govt calls for Aus ports to be managed by single body controlled by Commonwealth, as Qld miners lose jobs because of bottlenecks

More than 150 workers at a Queensland mine were handed redundancy notices in August, with half the job losses being blamed on an inability to ship coal because of infrastructure bottlenecks, wrote Tony Koch in The Australian (20/8/2007, p.1).

Five years of double-digit profit growth encourages pouring billions of dollars into new projects and equipment

Five years of double-digit profit growth was driving a spending boom across corporate Australia as the nation’s largest companies ploughed billions of dollars into new projects and equipment, reported The Australian Financial Review (25/9/2007, p. 1).

India, China fight for Australian coal; annual thermal $US65/tonne; spot to $US150

According to Andrew Trounson, The Australian, (22/9/2007), p. 34…coal remained the favourite cheap power source in Asia; • annual thermal coal prices rose 5 per cent last year to $US55 a tonne; but

• annual deals were done at up to $US65; and

• annual prices for high-quality hard cok­ing coal doubled in 2005 to $US125 a tonne, but last year the market eased back to $US98 a tonne.

Hunter Valley Resource Pacific Holdings receives $590.8 million takeover bid from New Hope, aim to gain two-port export rights

The New Hope takeover bid follows Swiss miner Xstrata’s attempts to consolidate the Hunter Valley region through failed bids for Gloucester Coal and Austral Coal and last week’s $1.1 billion agreed deal to buy assets from Centennial Coal.

Market forecast for Thursday, 4 October: Average prices down 1-25pc to $31.63-$34.54/MWh range on lower demand

Average prices are expected to be down 1-25 per cent to a range of $31.63-$34.54/MWh. System-wide maximum demand is predicted to drop 772MW (2.9 per cent) to 26,197, with falls in all regions except South Australia. The biggest decline is expected in NSW, where Sydney’s top temperature is expected to be down 12 degrees. The forecast temperature ranges for the NEM capitals are: Sydney 14-23 degrees (14-35 on Wednesday); Melbourne 10-20 degrees (15-19) ; Adelaide 8-21 degrees (13-18); Brisbane 18-32 degrees (18-31); and Hobart 6-15 degrees (10-14).

UQ starts course on-mined land rehabilitation as part of Masters of Mineral Resources: Alcoa gets a gong

When mining environmental scientist Elise Jeffery looks across a denuded landscape at Alcoa’s brown-coal mine in Anglesea, Victoria, she pictures an expanse of healthy indigenous woodland replete with rare and threatened plants and animals. But since 2000 Alcoa has engaged in restoring mined land to its original ecosystem to complement the surrounding area, listed on the National Estate Register by the Australian Heritage Commission because of its outstanding botanical diversity, wrote Helen Zampetakis in The Australian Financial Review (17/9/2007, p.35).

Queensland Rail panic: Pacific National to sign two coal contracts with Xstrata and Rio Tinto and break QR’s freight monopoly

Queensland Rail would outline a radical new corporate structure by month’s end that will include partnerships with the private sector in its $1.5 billion-a-year freight operations, according to Adele Ferguson in The Australian (12/9/2007, p.39).

South Korean power producers agree on thermal coal contract prices of $US66 a tonne, for 2008-09

There were already reports that South Korean power producers have agreed thermal coal contract prices of $US66 a tonne for 2008-09, seven months before the 1 April start of the next Japanese financial year, reported Stephen Wisenthal on The Australian Financial Review (17/9/2007, p.16).

Proposals to abolish domestic-use off-peak electricity unlikely to produce any short-term greenhouse savings, energy consultant says

Duncan Seddon, an independent consultant in the energy sector, wrote in The Australian Financial Review (20/9/2007, p. 71) that in order to run a coal-fired power station efficiently (thereby minimising greenhouse gas emissions), the boilers were run constantly at high rates. The boilers and coal usage were not turned down if electricity was not wanted, for example between midnight and 6am.

Queensland landholders dig in for a fight over $500 million mine develop­ment to provide Tarong power station with coal

Eighty landholders would lose their properties to make way for a $500 million mine develop­ment to provide the Tarong power station with coal, according to Peter Morley reported The Courier Mail (15/9/2007, p. 35).

20 prepared to sell: Most of the land was needed for the 2000ha mine at Kunioon, while the rest was required for a 16km conveyor link to the South Burnett generator. So far, Tarong Energy had the agreement of 20 property owners who were prepared to sell and relocate their cattle and grain businesses. But other landholders were settling in for a fight to defend land that had been held by some farmers for five generations.

“Progress hurts a lot of people”: Josie Wood, who in 1999 moved a home from Brisbane to live on a block owned by her family since 1929, said that like most people she was “pretty disgusted” about losing her land. “I am just horrified about what lies ahead — progress hurts a lot of people,” she said. “I do not know where I will go if I have to move.” Miss Wood, 81, said Tarong “was never up front with us and kept us in the dark”. The power generator advised affected landholders on Monday their land was needed for the mine. Tarong Energy, which pro­duces 18 per cent of the state’s power needs, said the land­holders would be “fairly compensated”. But Thomas Stephens, whose mixed property is required, said: “What is fair compensation when a property is not for sale? My house is two-and-a-half years old and I have two children and this is where I planned to stay until my dying day. It seems that is not going to happen.”

Regional economy benefits: The Kunioon resource was due to come on line in 2011, comp­lementing the existing Meandu mine that supplies Tarong, reported The Courier Mail. But first an environmental impact statement had to be approved by state and federal authorities. Tarong Energy chief executive officer Helen Gluer said the Kunioon decision was “great news” for the company and the South Burnett because it pro­vided a long-term fuel source and underpinned the region’s economy.

The Courier Mail, 15/9/2007, p. 35

Rio Tinto, Xstrata want NSW Govt to remove ‘common user clause’ at Port Waratah, so terminal can assign capacity to specific coal miners

Newcastle’s bottleneck has funnelled coalminers into rival camps, wrote Stephen Wisenthal in The Australian Financial Review (5/9/2007, p.52).

Big boys battle: On one side were Rio Tinto and Xstrata, the Hunter Valley’s two biggest coal producers, which dominated the shareholding of Port Waratah Coal Services, owner of Newcastle’s export terminal. On the other were BHP Billiton and several others, calling themselves Newcastle Coal Infrastructure Group, including US-based Peabody Energy, Felix Resources and Centennial Coal. Last year, the NSW Government gave NCIG the right to develop a new terminal next to PWCS’s Kooragang Island facility after the miners complained expansion was too slow at the existing terminal. The losing bidder was PWCS.

Competitive advantage: NCIG now said Rio Tinto subsidiary Coal & Allied Industries and Xstrata were trying either to force its members out of Port Waratah before the new terminal is ready, or disrupt the final stages of financing for the new development. Rio Tinto and Xstrata argued the present arrangement at Port Waratah was unsustainable, as an “open access” arrangement meant the operator of any new mine could elbow aside existing users to claim part of its capacity. Rio Tinto and Xstrata said NCIG miners would have a competitive advantage once they finished their terminal because they would have guaranteed allocations.

Urging rule-change: That’s why the big two were calling for the State Government to remove a ‘common user clause’ in legislation governing Port Waratah, so that the terminal can assign capacity to specific miners as happened in Queensland. At recent thermal coal prices of $US70 a tonne, every 10 million tonnes of capacity translated to annual sales of at least $850 million. The actual value could be higher, as Hunter Valley products such as semi-soft coking coal usually sell at a premium to thermal coal, and all prices were on the way up.

The Australian Financial Review, 5/9/2007, p. 52