CAPITAL INVESTMENTS – AUSTRALIA

Green lawfare hits projects worth $65bn

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Original article by Dennis Shanahan
The Australian – Page: 1 & 4 : 6-Mar-20

The Institute of Public Affairs claims that 28 projects between 2000 and 2019 were delayed as a result of action by activist groups using section 487 of the federal Environment Protection Act. The IPA claims that these projects have a combined value of more than $65 billion. They include Adani’s $16.5 billion coalmine in Queensland, a $140 million port in the Northern Territory and a $30 million salmon farm in Tasmania. Kurt Wallace from the IPA claims that 94 per cent of the cases instigated by activists under s 487 failed to bring about any significant change to the original project.

CORPORATES
INSTITUTE OF PUBLIC AFFAIRS LIMITED, ADANI MINING PTY LTD

Coronavirus to hit budget and income growth

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Original article by Matthew Cranston
The Australian Financial Review – Page: 5 : 28-Feb-20

Modelling by Deloitte Access Economics suggests that the coronavirus could see growth in national income fall from 6.4 per cent to just two per cent in the first half of 2020. This would have a $5.9bn impact on the domestic economy, with the tourism and education sectors being particularly hard hit. Meanwhile, economists have downgraded their GDP growth forecasts for the December quarter after data showed that there was a 2.8 per cent decline in capital expenditure during the period. Economists had expected growth of 0.5 per cent.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD

Drop hurdle rates or risk missing out

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Original article by James Thomson
The Australian Financial Review – Page: 1 & 7 : 3-Jan-20

Australian Competition and Consumer Commission chairman Rod Sims has urged local companies to lower their ‘hurdle rates’ for investment returns to reflect lower rates. His comments regarding lower hurdle rates echo those of federal Treasurer Josh Frydenberg and Reserve Bank of Australia governor Philip Lowe. Sims says if firms do not adjust their hurdle rates, Australia will forgo business investment, while overseas companies with more realistic hurdle rates will acquire more local assets. Sims has also urged the corporate sector to back his push for new laws that outlaw unfair business practices.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Energy giants make good on exploration promise

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 23 : 20-Dec-19

Chevron will spend $75.9m on oil and gas exploration in Australia over the next three years, while BP in turn will spend $40.6m. South Australia’s Energy Minister Dan van Holst Pellekaan has welcomed their commitment to spend a combined $60m on exploration in the state. Meanwhile, Centre Alliance MP Rebekha Sharkie has criticised the National Offshore Petroleum Safety & Environmental Management Authority’s decision to approve Equinor’s drilling program in the Great Australian Bight. Chevron and BP had both abandoned plans to undertake exploration in the Bight in recent years.

CORPORATES
CHEVRON CORPORATION, BP PLC, SOUTH AUSTRALIA. DEPT FOR TRANSPORT, ENERGY AND INFRASTRUCTURE, AUSTRALIA. NATIONAL OFFSHORE PETROLEUM SAFETY AND ENVIRONMENTAL MANAGEMENT AUTHORITY, EQUINOR ASA, CENTRE ALLIANCE, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE

Rio wears cash drain to bet on copper

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Original article by Peter Ker
The Australian Financial Review – Page: 19 : 5-Dec-19

Rio Tinto will extend the life of its Kennecott copper mine in the US until at least 2032 after unveiling plans to spend $US1.5bn on a new pit wall cutback. Rio Tinto is also widely tipped to spend some $US1.5bn on the expansion of its Oyu Tolgoi copper mine in Mongolia in 2020. The capital investment programs have raised doubts as to whether Rio Tinto’s copper and diamonds division will generate free cash flow in 2020. Copper and diamonds have accounted for the bulk of its expenditure on exploration in 2019.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP GROUP LIMITED – ASX BHP

Investment strike keeps growth low

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Original article by Glenda Korporaal
The Australian – Page: 17 & 27 : 5-Dec-19

Commonwealth Bank economist Michael Blythe says the latest GDP data shows that Australia has a two-speed economy, with private sector spending down 0.1 per cent in the September quarter and 0.3 per cent year-on-year, while public sector spending increased by 1.1 per cent and 4.8 per cent respectively. Master Builders Australia has urged the federal government to fast-track smaller infrastructure projects, with chief economist Shane Garrett noting that businesses and consumers lack the confidence to spend at present.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MASTER BUILDERS AUSTRALIA INCORPORATED, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA, BUSINESS COUNCIL OF AUSTRALIA, WAGNERS HOLDING COMPANY LIMITED – ASX WGN

Spending forecasts raise GDP fears

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Original article by Matthew Cranston
The Australian Financial Review – Page: 7 : 29-Nov-19

Data from the Australian Bureau of Statistics shows that business investment fell by 0.2 per cent in the September quarter and by 1.3 per cent year-on-year. Mining investment increased by 1.2 per cent in the year to September, while investment in equipment, plant and machinery was down 3.5 per cent. Josh Williamson of Citigroup says the latter figure is likely to reduce GDP growth in the September quarter by 0.15 percentage points.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, CITIGROUP PTY LTD

Infrastructure spending set to take a dive

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Original article by Adam Creighton
The Australian – Page: 6 : 28-Nov-19

The Parliamentary Budget Office has forecast that Australia’s net infrastructure investment will peak at $38bn in 2019-20, before falling over the next three years. This is primarily due to expectations that the net debt of the state governments will blow out to around $156bn by 2022. This would constitute the states’ highest share of public debt in two decades.

CORPORATES
AUSTRALIA. PARLIAMENTARY BUDGET OFFICE

RBA urges boards: cut hurdle rates

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Original article by Matthew Cranston
The Australian Financial Review – Page: 1 & 6 : 30-Oct-19

Reserve Bank of Australia governor Philip Lowe has used a speech in Canberra to argue that businesses should reduce their return hurdle rates on new investments in response to historically low interest rates. He contends that many business investments that did not make sense commercially when interest rates were much higher should now proceed. Lowe also emphasised that negative interest rates are unlikely in Australia.

CORPORATES
RESERVE BANK OF AUSTRALIA

BHP holds out against activist push

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Original article by Nick Evans
The Australian – Page: 17 & 20 : 18-Oct-19

BHP CEO Andrew Mackenzie has defended its membership of mining industry groups such as the Minerals Council of Australia and associated entities like Coal 21, amid growing pressure from activist groups and shareholders. Meanwhile, BHP has advised that scheduled maintenance work at Port Hedland resulted in its Pilbara iron ore production falling three per cent to 69 million tonnes in the September quarter. BHP has also approved additional expenditure of $US344m on the Jansen potash project in Canada, ahead of a final investment decision in February 2021.

CORPORATES
BHP GROUP LIMITED – ASX BHP, MINERALS COUNCIL OF AUSTRALIA, COAL 21