Australia to propose tax incentives for critical minerals
The proposed law will set up a tax incentive worth 10% of relevant processing and refining costs for 31 critical minerals.
Global miner Rio Tinto said on Tuesday that its second-quarter iron ore shipments from Australia rose 14 percent and indicated its annual production would be at the upper end of its guidance.
The miner said it expected iron ore shipments for the year to be at the upper end of its range of 330 million to 340 million tonnes, driven by productivity improvements and fewer weather-related disruptions compared with the same quarter last year.
It had said earlier it did not expect tensions over a global trade war to materially affect steel demand.
Rio’s Australian iron ore shipments totalled 88.5 million tonnes in Q2, compared with 77.7 million tonnes a year ago.
Each of the four big iron ore miners are expected to log record production in the second quarter, given a ramp up in China’s steel demand in the quarter, Shipbroker Clarksons Platou Securities said.
“Volumes were generally held back a bit in 1Q18, as the Chinese steel complex was weaker (due to) winter production cuts, Chinese New Year, National People’s Congress. As Chinese steel output increased to record levels in 2Q18, iron ore volumes picked up, as well,” it said in a report.
Rio’s Australian iron ore shipments totalled 88.5 million tonnes in the quarter ended June 30, compared with 77.7 million tonnes a year ago, the company said in a statement. UBS had expected iron ore shipments to rise 14 percent for the quarter. Iron ore prices were flat over the quarter.
Rio Tinto said its mined copper production jumped by 26 percent due to higher grades at Kennecott and a labour union strike at Escondida that impaired production in the first half of last year. Negotiations are underway for a new contract at Escondida after the current one expires on August 1.
The company recently confirmed the sale of its 40 percent stake in the world’s second-biggest copper mine, Grasberg, for $3.5 billion to Indonesia’s state mining company PT Inalum and said that it did not expect to record any share of copper production from it this year.
Rio also flagged “significant raw material costs headwinds” to its aluminium business given its exposure to soaring alumina prices, which it expected to continue into the second half.
Alumina prices have surged following the partial shutdown of the world’s biggest plant, Alunorte in Brazil, outside China, as well as rising input costs.
While Rio said in April it was in the process of calling force majeure on contracts that had been impacted by U.S. sanctions on Russian companies, it has not done so so far given the wind-down period for sanctions-hit business was extended until Oct. 23.
(Reporting by Ambar Warrick in BENGALURU and Melanie Burton in MELBOURNE; Editing by Peter Cooney and Stephen Coates)
