Xstrata, Rio restart work on mines after tax accord
Wednesday, 7 July 2010
MELBOURNE, July 6 (Bloomberg): Xstrata Plc, the biggest exporter of power-station coal, resumed work on a A$6 billion ($5 billion) mine and Rio Tinto Group revived a study for an iron ore expansion after Australia reduced a planned resource profits tax.
Initial work and exploration totaling A$186 million will restart at three coal projects in Queensland state, Zug, Switzerland-based Xstrata said Tuesday in a statement. Rio is reopening studies for expansion of its iron ore operations in the Pilbara region, Sam Walsh, chief executive of its iron ore unit, told reporters Tuesday in Perth.
Prime Minister Julia Gillard last week agreed to cut the tax to 30 per cent from 40 per cent, a week after ousting Kevin Rudd as the nation's leader to defuse a row with mining companies that damped the government's election prospects. A development decision for the A$6 billion Wandoan project is expected in the second half of 2011, Xstrata said.
"Tuesday's decision effectively lifts the suspension on expenditure announced by Xstrata last month and allows the next stage of planning for this internationally significant Wandoan project to proceed," Xstrata Coal Chief Executive Peter Freyberg said in the statement.
Shares in London-based Rio fell 0.2 per cent to A$65.10 at the 4:10 pm Sydney time close on the Australian stock exchange.
Rio's capital spending this year may be between $5 billion and $6 billion, the company said in March. An expansion of Rio's iron ore mines in Western Australia's Pilbara region will boost capacity to 330 million tonnes by 2015 from 220 million tonnes.
Initial work and exploration totaling A$186 million will restart at three coal projects in Queensland state, Zug, Switzerland-based Xstrata said Tuesday in a statement. Rio is reopening studies for expansion of its iron ore operations in the Pilbara region, Sam Walsh, chief executive of its iron ore unit, told reporters Tuesday in Perth.
Prime Minister Julia Gillard last week agreed to cut the tax to 30 per cent from 40 per cent, a week after ousting Kevin Rudd as the nation's leader to defuse a row with mining companies that damped the government's election prospects. A development decision for the A$6 billion Wandoan project is expected in the second half of 2011, Xstrata said.
"Tuesday's decision effectively lifts the suspension on expenditure announced by Xstrata last month and allows the next stage of planning for this internationally significant Wandoan project to proceed," Xstrata Coal Chief Executive Peter Freyberg said in the statement.
Shares in London-based Rio fell 0.2 per cent to A$65.10 at the 4:10 pm Sydney time close on the Australian stock exchange.
Rio's capital spending this year may be between $5 billion and $6 billion, the company said in March. An expansion of Rio's iron ore mines in Western Australia's Pilbara region will boost capacity to 330 million tonnes by 2015 from 220 million tonnes.