Death Inc

Well this is a great talking point here in Central QLD,

Rio tinto annouces it will sell BSL (Boyne Smelter) and NRG Gladstone Power station. This comes days after the carbon Tax. Say good bye to some jobs I think :(

While this is just all talk and will go ahead, I can speculate Gillard smiling saying that pollution is being reduced as companies are reducing carbon emmissions. Yet the fact is they are shutting down and unemployment will go up in the future :(

Why couldnt some one become the first person to shoot an aussie prime minister and make history and save the day. I think they would of been rewarded / not punished IMHO :(

GOGO offshore smelting?

well there was ap lanned expansion a while ago but Rio found out it was cheaper and easier to build the expansion in china and run it there, than build it, ship it to the QLD plant and add it in and run it.

Go figure.

An the BSL generates a lot of $$$$ for the government. Wonder if they will wake up soon

You don't think the value of the Australian dollar has anything to do with moving things offshore?

dunno 'not naf named another naf name'

here is the news

http://www.couriermail.com.au/business/rio-tinto-selling-13-assets-across-australia-including-several-queensland-businesses/story-e6freqmx-1226168409743

Well that gives no real reason for selling.. I would think the mining industry would be happy to mention the carbon tax if that was the reason for the sale.

since most mining income is from exporting, and exporters make more money when our dollar is weaker, naf could be onto something.

Dollar goes up and down why not sell it last time the dollar was up, it also works both ways, makes it cheaper to do expansions while the dollar is up. If you assume the world economy will eventually level out again then our dollar will fall in the future to a more normal level. It is very short sighted to walk away from billions worth of infrastructure and investment based on a transient dollar value.
But the dollar will be in the mix given that the carbon tax will add 16mwh (to produce 1 tonne of aluminium from alumina this does not include getting Alumina from Bauxite) * .6t of carbon (depending on power station type) * $23 per tone = $220.80 per tonne extra or around 10% on $2.5k per tonne. if Rio is one of the secret top 500 which would be a safe bet.
The Aluminium industry reduced power usage by an amazing figure 80 or 90% back in the 80’s to reduce pollution they have no where to go but offshore
Quote from some where “The availability of cheap electricity is therefore essential for economic production.” carbon tax = 10% increase in power costs and that = 40-50% of the cost of making it
You could extrapolate that the carbon effect is to increase carbon produced as smelting reduces the volume of the product, hence to move the same amount of finished product you need more ships i.e. smelting output + difference in shipping volume. which = 40-60%  of bauxite volume is Alumina, and you get 1/2 that result as Aluminium meaning you have to ship 3 times the volume of material.
Given that we produce 40% of the world aluminium and there is a mining boom or demand we should be able to charge more, where else are they going to get it from

The article does say “they no longer fitted Rio's strategy to own only "top tier, low cost, long life" assets in the lowest half of the industry's cost curve.” they will be exiting the Aluminium smelting industry in Australia keeping only Bauxite mining and Alumina refining.

Also make the assets harder to sell while the dollar is up

cash-a-can

My old man works at the Rio Tinto smelter down here which is being put on the market. A lot of uncertainty involved that's for sure.