Dow Jones: Rio Tinto Says Costs, Other Factors Squeezing Coal Mining

Staff Reporters
Dow Jones MetalSource Steel News 

MELBOURNE--A mix of increasing taxes, delays in gaining approvals and rising costs is squeezing the coal mining industry's productivity and growth, the managing director of Rio Tinto PLC's (RIO) Australian coal operations warned. Bill Champion in a presentation said coal companies are also being hit by difficulties accessing skilled labor, a strong exchange rate and the rising cost of accessing infrastructure. "In isolation, these factors may not seem to have significant impact, but cumulatively they can transform a good value proposition and render it marginal," Mr. Champion said in a slide presentation published on the mining company's website. Mr. Champion highlighted the longer time it's taking companies to secure environmental approvals for coal projects, which can take more than five years as the process goes through additional pre-assesments and additional independent assessments through to appeals. However, he told the UBS conference in Sydney that coal has a strong long-term outlook and will remain an important energy source. China and India will continue to drive demand growth in the years ahead, he said.

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