Tag Archives: slash

Mineral sands miner Iluka to slash jobs

Updated February 21, 2013 13:44:03

The mineral sands miner Iluka Resources says its full-year profit has fallen by a third and it is planning on cutting up to 200 jobs.

The company made $363.2 million after tax last year.

That is down 33 per cent on its 2011 profit.

In an effort to reduce its production costs, the company says as many as 200 positions within its Australian operations will be made redundant.

Iluka’s managing director David Robb says staff were aware that job cuts were on the cards when prices for its products dropped last year.

He says job losses will mainly be felt by contractors and he is confident of getting the workers back when prices improve.

The company announced in January, that its mineral sands mine near Eneabba in the state’s mid west, will remain idle until economic conditions improve.

Iluka is the largest zircon producer in the world and the second biggest producer of the high grade titanium dioxide minerals.

The majority of the company’s production operations are within Australia, including WA, Victoria and South Australia.

It also has mining and processing operations in Virginia in the United States.

Topics: mineral-sands, company-news, wa

First posted February 21, 2013 12:07:38

Britain set to slash growth forecasts in budget update

London: Britain is expected to cut the country’s growth forecasts this week in a key budget update, as finance minister George Osborne increasingly faces calls to rein in the government’s tough austerity measures.

Chancellor of the Exchequer Osborne was to deliver his Autumn Statement before parliament on Wednesday, alongside the latest growth and borrowing forecasts from Britain’s Office for Budget Responsibility (OBR) fiscal watchdog.

Experts predicted that the OBR would cut its forecasts for Britain’s gross domestic product (GDP) with the country’s economy buffeted by state austerity, inflationary pressures and the debt crisis in key trading partner the eurozone.

Weaker economic growth would slash future tax receipts, hitting the coalition government’s purse and sparking upward revisions to its official borrowing targets, analysts say.

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Osborne had in March forecast that the economy would grow by a weaker-than-expected 0.8 per cent this year, followed by 2.0 per cent in 2013 and 2.7 per cent in 2014.

“The growth forecast will have to be revised down, not only because the euro area and hence exports will remain weak, but also because real household incomes continue to decline partly due to the persistence of higher than expected inflation,” Daiwa Capital Markets economist Chris Scicluna told AFP.

“Overall, I think it will be difficult to justify a growth forecast much above 0.5 per cent in 2013.

“Against the backdrop of the flat-lining economy, the chancellor would be ill-advised to try to tighten fiscal policy,” he added.

Recent official data showed Britain had escaped from recession in the third quarter of this year, with its economy growing 1.0 per cent thanks to the London Olympics and rebounding activity after public holidays in the second quarter.

However the outlook is clouded by the eurozone’s long-running debt drama, despite it easing somewhat last week after debt-plagued Greece was granted its latest tranche of bailout cash.

“Disappointing news has become an unfortunate feature of recent Autumn Statements and again this year the chancellor will have to accept downgrades to the OBR’s growth projections,” said KPMG chief economist Andrew Smith.

“These will not be as savage as last year… but nevertheless point to further slippage in the fiscal position.”

Alongside Osborne’s annual budget in March, the OBR predicted that public sector net borrowing (PSNB) as a proportion of economic output would begin to fall in 2015/2016, after peaking at 76.3 per cent of GDP in 2014/15.

And it forecast state borrowing would reach £120 billion ($192 billion, €148 billion) in the 2012/2013 financial year ending in March, compared with #121.4 billion in 2011/2012.

However, with PSNB already standing at £73.3 billion and four months of the financial year to go, Osborne could breach the target.

Britain’s Conservative-Liberal Democrat government, which rose to power in 2010, has imposed a series of painful austerity measures to slash a record deficit that was inherited from the previous Labour administration.

The coalition blamed the recession largely on the debt crisis in the neighbouring eurozone, but the main opposition Labour party claims that the downturn was mainly owing to hefty cuts in state spending.

“At best, the prospects remain uncertain and achieving sustainable above-trend economic growth remains a distant prospect,” said Neil MacKinnon, economist at VTB Capital financial group.

“Achieving the right balance between successful fiscal consolidation and durable economic growth remains a challenge for policymakers.”

The Organisation for Economic Co-operation and Development last week urged Osborne to push back his debt reduction targets rather than drive through more growth-damaging austerity measures.

Away from economic forecasts — and in a populist move — Osborne may on Wednesday decide to announce a crack down on multinationals like Google and Starbucks, who stand accused of paying insufficient corporation tax in Britain.

Osborne “will need to be seen to be active in response to recent public outrage at apparent abuses of the (tax) system,” said analyst Scicluna.

“But these initiatives will hardly provide reliable sources of new revenue.”

He added that Osborne’s recent appointment of Canadian central bank chief Mark Carney to head the Bank of England “will hardly provide a magic remedy” to Britain’s economic ills.

“Indeed, the Autumn Statement will provide a reminder that the government’s economic policy locker is pretty much empty.”

Spain’s rescued banks to shrink, slash jobs

Brussels/Madrid: Spain’s four nationalised banks will more than halve their balance sheets in five years, slash jobs and impose hefty losses on bondholders, under plans approved by the European Commission on Wednesday.

The measures open the door for nearly €40 billion (Dh188 billion, $52 billion)in Eurozone bail-out funds for the state-rescued banks, offering hope for an end to Spain’s banking crisis which has pushed the country to the brink of asking for sovereign aid.

The approval sets in place one of the most far-reaching over-hauls of any European banking system ordered by the Commission since the start of a banking crisis in mid-2007 with the near collapse of German lender IKB.

“Our objective is to restore the viability of banks receiving aid so that they are able to function without public support in the future,” said European Union Competition Commissioner Joaquin Almunia.

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Bankia, NCG Banco, Catalunya Banc and Banco de Valencia were taken over by the Spanish state after unsustainable lending during the country’s decade-long property boom left the lenders dangerously short of capital.

The smallest of the four banks, Banco de Valencia, will be sold to one of Spain’s healthiest lenders Caixabank, while the other three banks must cut their balance sheets by more than 60 per cent over the next five years.

It was cheaper to sell Banco de Valencia under a loss protection scheme than to wind it down, the Commission said. Spain will sell NCG Banco and Catalunya Banc within 5 years or liquidate them.

Almunia said the nationalised banks would have to close up to half their branches during the five-year overhaul process.

The biggest of the banks, Bankia, said it would lay off over a quarter of its workforce amounting to over 6,000 staff, reduce its branch network by around 39 per cent and aim to return to profitability by 2013.

Bankia, formed from the merger of seven savings banks in 2010, said holders of hybrid debt would contribute up to €4.8 billion to the recapitalisation, through losses incurred by swapping their holdings for shares.

The European Commission said the cost to hybrid and subordinated bondholders in the restructuring of the nationalised banks will come to about €10 billion.

Many hybrid debt holders at the nationalised banks are retail customers who say they were conned into buying complex financial instruments that buoyed banks’ capital levels instead of fixed-term savings accounts.

The Commission said it would ensure the banks use no more taxpayers’ money than necessary and that they do not go back to unsustainable business practices.

The Commissioner said he would decide on other Spanish banks with capital shortfalls on December 20.

The approval allows the Eurozone to disburse the funds from its permanent ESM bailout fund. Spain was given approval to receive up to €100 billion from the ESM in the summer.

Electricity overhaul could slash bills

Updated October 18, 2012 16:12:51

Household power bills could be slashed by up to $250 a year under a Productivity Commission plan to overhaul how the electricity market works.

The Commission’s draft report found consumers are paying a significant amount of money just so the network can deal with peak demand – something that only happens for a short period of time.

It suggests household bills could be drastically reduced if demand-based pricing was introduced, because it would encourage consumers to cut back on electricity usage during times of peak demand.

“At the moment, 25 per cent of household power bills are due to having to cater for the peak demand that occurs for a very small period during each year – approximately 40 hours a year when typically we have extraordinary hot weather and people are running air conditioners flat out,” Commissioner Philip Weickhardt told ABC radio’s AM program.

“Ironically it is the poor and vulnerable consumers who typically would not have air conditioners who are cross-subsidising in a hidden way those people who are running their air conditioners at that time.”

With demand-based pricing, consumers who use power at times of peak demand would contribute to the cost of providing that electricity.

The Commission estimates that critical peak pricing would provide savings worth between $100 and $250 per household each year.

The idea is one of several recommendations made in the Commission’s 800-page draft report, which also backs Prime Minister Julia Gillard’s argument that network upgrades have been a key driver of power price rises over recent years.

Ms Gillard opened a new battle with state premiers in August, urging them to curb the over-investment in what she described as “gold-plated” power networks.

She argued it was a “huge” cost to the Australian economy and had to stop.

The Commission says the current regime encourages power companies to build “too much” and billions of dollars could be saved if those incentives were removed.

“Electricity bills on average across the national electricity market have risen 50 per cent in real terms over the last five years,” Mr Weickhardt said.

“That’s a huge rise and most of that rise has been due to the networks.”

But Opposition Leader Tony Abbott described it as a “myth” that Labor was interested in bringing power prices down.

“The whole purpose of the carbon tax is to raise the price of power,” Mr Abbott said. “If the price doesn’t go up, the carbon tax isn’t working.”

“This Government is deliberately pursuing a policy of putting prices up, that is the whole point of a carbon tax.”

The Productivity Commission has also made the argument for the full privatisation of government-owned power networks in Queensland, New South Wales and Tasmania.

“While governments have a legitimate role in owning and operating many services in Australia, the rationale for state-ownership of electricity network businesses no longer holds,” the report states.

The Commission says state-owned businesses are subject to extra government requirements that private sector firms are not, including higher pay rates and a need to provide greater protection to their workers from structural changes.

It has also questioned the decision by state-owned power companies to provide millions of dollars in community sponsorship, of a magnitude at odds with commercially-oriented firms.

“It is particularly hard to characterise such sponsorships as building a brand name to attract customers, since customers have no choice but to deal with them,” the report states.

Topics: electricity-energy-and-utilities, government-and-politics, federal-government, federal—state-issues, house-and-home, canberra-2600, nsw, tas

First posted October 18, 2012 11:49:31