July 15th (Trading Markets) – Mining giant Rio Tinto Plc. said it has invested over $500 million in power generation to support its expansion of iron ore mining capacity at Pilbara in Western Australia.

The company said it will build generation and transmission infrastructure near Karratha to supply electricity to its port and mine operations.

The new power station, to be commissioned in 2010, will use natural gas turbines, resulting in a significant reduction in emission rates compared with the two steam power stations currently in operation at the Cape Lambert and Dampier ports, which will be decommissioned, it said.

As part of the investment, Rio Tinto will also build a 220 KV power line from Cape Lambert to the new power station, the company added.

June 15th (The Age) – WESTERN Australia’s gas crisis will hit the market hard this week as high energy costs force some businesses to shut down and lay off workers.

The WA Chamber of Commerce and Industry has estimated 14% of 83 companies it has surveyed may shut down or will be shutting down soon.

Apache Energy says it will be two months before partial gas supply is resumed from its Varanus Island gas plant, where a June 3 explosion cut off one-third of the state’s domestic gas supply.

BHP Billiton has brought forward a planned four-month shutdown of its Kalgoorlie nickel smelter, a move that may cut its nickel sales by 25,000 tonnes in the next financial year.

With a cut of 3000 tonnes estimated for this financial year, the halt equates to a loss of $US65.8 million ($A70.3 million) at current nickel prices.

Rio Tinto is also bringing forward planned maintenance shutdowns at its WA iron ore operations.

While WA miners face difficulty, the Australian share market is expected to continue its rally after buyers returned to Wall Street at the end of last week. Another pointer is in the June share price index futures contract, which improved just over 1% during trading on the Sydney futures exchange on Friday night. CommSec chief equities economist, Craig James, tipped a 50 to 60 point gain on the ASX after US stocks ended last week higher.

Mr James said the sell-off at the start of last week on the ASX, which resulted in its biggest one-day fall in almost three months, had been unwarranted.

“Valuations have come down to the lowest levels we’ve seen in 15 or 16 years,” Mr James said.

WA Premier, Alan Carpenter, said businesses which switched from gas-fired electricity to diesel fired electricity will face far higher electricity costs. “Diesel-fired electricity is far more expensive than gas-fired electricity, so businesses will be making the decision as to whether the increased cost they are going to have to pay for energy warrants them shutting down for a while, or scaling down their production for a while, or standing down their staff for a while,” he said.

Unions WA secretary Dave Robinson has said hundreds of workers have already been laid off at laundries, in the meat industry and in timber-related industries.

He has predicted the number could soon run into the thousands.

Federal Resources Minister Martin Ferguson has met with Mr Carpenter and said Centrelink was on standby to help out if the situation worsened and large numbers of workers were laid off.

Mr Carpenter said the next two weeks would be very hard.

“It’s taken a while for the impact to wash through, but it’s really coming upon us now, economically.

“This week, I think will be very difficult.”

Blackout in Chhattisgarh

June 14, 2008

June 14th (The Times of India) – Thousands of villages in four districts of Chhattisgarh continue to languish in darkness even as the state government there is making efforts to tap solar energy to thwart the repeated attacks by Maoists on the power distribution network.

Sources told ‘TOI’ that officials have prepared an action plan to light up the interior forest areas of five districts — Dantewada, Bijapur, Narayanpur, Kanker and Jagdalpur — with solar power. A Dantewada senior police official said it would take another week to restore power in 5,200 villages after the Maoists blew up two 220-kV high tension towers at Barsur in Dantewada district on June 5.

“Nearly 200 Chhattisgarh state electricity board employees with the help of CRPF battalions and special police are struggling hard to re-erect the towers,” Kunta DSP Praful Thakur said. The exercise is proving to be tough in the hilly Bastar terrain where laying power transmission lines and installing towers are time-consuming. Sources said Maoist threat, mining of the area and heavy rains have also hampered the restoration work badly.

The Maoists blasted and uprooted 14 electric poles in Narayanpur district on June 3, snapping power supply to 70 villages. On May 31 last year, Maoists caused a major damage by blowing up three 132 kv HT towers in Narayanpur district and kept the entire Bastar region in darkness for nearly a fortnight.

The latest strike by the Maoists has effectively hit mining operations in Bailadilla, resulting in huge losses to the National Mineral Development Corporation (NMDC).

The NMDC moves the mined ore on the Kothavalasa-Kirandul railway line to Visakhapatnam. Sources said Vizag Steel Plant (VSP) and steel units in Orissa would be facing severe iron ore crunch if the situation continues for a few more days.

“Some 12 to 14 rakes of iron ore goes to VSP every day from Bailadilla,” a source said.

Not only the mining industry, businesses, railways and farmers have also suffered heavy losses, sources said. “Civic amenities in some towns were impaired and cellular communication was badly hit,” Thakur said.

The Maoists as part of their ‘Jan Pituri Saptah’ stir against the state were hitting soft targets, an analyst said. The stir ended on Friday.

They killed three cops by triggering a landmine at Durg on June 8 and attacked Bishrampur police station a day earlier.

“The rebels are blowing up power lines, disrupting road and rail communication links and snapping phone lines to deal a blow to the morale of police forces,” a senior IPS officer of Dantewada said.

He recalled that the Maoists had targeted telecom towers, power transmission/generation centres, HT towers and railway lines nearly 37 times last year.

“These repeated attacks reveal their intentions clearly. They want to paralyse normal life, sabotage economic activity and dictate terms to the administration,” he said.