Australia’s coal sector hopeful

With revenues of $60 billion last year and operations at the ends of the earth, few companies are in a better position to take the pulse of the global economy and the resource sector than Caterpillar. But what is it saying about the outlook for 2012?

Labour negotiations between BHP Billiton and unions representing coal workers are at an impasse and could disrupt coal operations across Eastern Australia.

FLSmidth, a global engineering company out of Denmark, is planning a A$267 million acquisition of Ludowici Limited, an Brisbane-based company that manufactures coal centrifuges, vibrating screens and complementary wear resistant products.

The share price performance of those non-Chinese rare earth miners closest to production – Molycorp in the US, Australia's Lynas and Great Western Minerals in South Africa – is in stark contrast to what is happening to rare earth oxide prices, some of which have more than halved over the last three months.

Perceiving a cloudy future for world markets, Ivanhoe Mines (NYSE:IVN) announced that they had negotiated an additional US$1.8 billion bridge financing for Oyu Tolgoi.

After a rough 2011, uranium companies started January looking up.

The Argyle diamond mine, long a dominant force in the global diamond market saw production drop 14% year on year during the last quarter of 2011.

In what is likely to be upbeat year for Australian mining M&A, some large Asian and U.S. companies are ready to bet on the country's coal, iron ore and uranium assets to meet booming demand for power.

Miner Fortescue Metals shipped a record 14.77 million tonnes of iron ore in the December quarter.