World's largest copper mine faces strike threat

Workers at the world's biggest copper mine in Chile threatened to go on strike next week after the collapse of salary negotiations. The work stoppage at Minera Escondida, which is controlled by Anglo-Australian mining giant BHP Billiton, will start Monday if management fails to make a new offer to the miners, said the union representing 2,000 workers.

In its last offer Wednesday, the company proposed a 3% salary increase and a 15,000 dollar bonus to each miner, but the union rejected it as an "insult." The miners are asking for a 13% salary increase and a 30,000 dollar bonus, as the price of copper has nearly quadrupled over the last three years. Mina Escondida, located in the Atacama desert in northern Chile, produces 8% of the world's copper.

- Guess what this will do to the copper price?

(2006-08-05 19:32:23 SGT) [Biz] Permalink

IBM to buy MRO Software for $740 million

news.yahoo.com :

International Business Machines agreed to buy MRO Software for $740 million, giving IBM a niche provider of software and services to help customers including nuclear power plants and oil companies make the most efficient use of industrial assets. No cuts are expected to MRO's work force of more than 900 as a result of the acquisition.

MRO's customer list includes nuclear power plant operators and utilities as well as such companies as Exxon Mobil, BP, China National Offshore Oil Co, Frito-Lay, Ford and General Motors. MRO, founded in 1968, reported revenue of $199 million in its most recent fiscal year.

- Interesting story in more than one way. Big money moving into the energy sector. Ongoing merger mania.

(2006-08-05 19:29:22 SGT) [Biz] Permalink

Singapore ERP rates to go up, mainly at CTE

channelnewsasia.com, app.lta.gov.sg :

Bad news for some motorists, especially for those who drive on the already congested Central Expressway. ERP rates are set to go up by 50 cents on the CTE north and south of Braddell Road, on the northbound CTE after the Pan-Island Expressway, as well as the PIE slip road into CTE. Rates will also go up on the PIE at Kallang Bahru as well as East Coast Parkway at Fort Road.

The increase comes after the Land Transport Authority's quarterly review of traffic conditions and is being imposed to maintain LTA's aim of an optimal speed range of 45 to 65 km/h on expressways.

- Okay, so "bring it on!" (*cough*) What else hasn't increased yet? Let's see, if crude oil surges convincingly past $75 and holds it there for more than a week, petrol and diesel prices will have to go up - the retail stations are on rather thin margins already. What else, let's also wait for things like water, gas, and garbage collection fees to catch up - that ought to "tidy up the loose ends" in the utilities bill.

Lately, I've also noticed that the portions for my lunch-time meals at the local coffeeshop near the office have been getting smaller - inflation by stealth. The price of a cup of coffee has already gone up, so we only have to await the rest of the drinks - including the proverbial inflation benchmark, the can of Coca-Cola.

Well, so that covers transport, utilities, food. Healthcare and education go up 5-6% each year, every year. Okay, what about rentals? All sorts of rentals - housing, office, industrial, retail space. That would be quite the killer, wouldn't it?

Oil prices could cause global recession : S&P Chief Economist

peakoil.com -> abc.net.au :

There was a dire warning today from one of the world's leading credit ratings agencies : an oil price shock could cause a major global recession, and financial markets aren't building in enough capacity to absorb risk. David Wyss is the chief economist at Standard & Poor's. He says that if there's a war in Iran that cuts off Middle East oil supplies, the price of crude could hit US$250 a barrel. David Wyss, visiting Sydney from New York City, spoke to Economics Correspondent Stephen Long :

STEPHEN LONG: How bad a recession are we talking about?

DAVID WYSS: My guess at that point would be on the order of the 1980-82 recession, with unemployment rates in the US climbing up towards ten per cent and you know, a couple of years of significantly negative real GDP.

STEPHEN LONG: How well placed are financial markets to deal with the kind of extra shock that we're talking about?

DAVID WYSS: If you're talking at $100 oil, I think financial markets are pretty well placed. At $250 though, that becomes a major problem and I think that's a problem for financial markets, not just the real economy, everything is in trouble.

(2006-08-05 18:47:47 SGT) [Energy] Permalink

Russian court declares Yukos bankrupt

chron.com :

OAO Yukos, once Russia' biggest oil company, was declared bankrupt after a three-year campaign by government tax authorities that critics called a politically motivated campaign against Yukos' founder. The government cast its actions as a crusade against a rotten corporate empire. The ruling was a muted epilogue that followed the conviction of Yukos' billionaire founder Mikhail Khodorkovsky last summer and the sale of the company's production unit Yuganskneftegaz to the state after a disputed auction in December 2004.

Analysts expect that state-controlled gas monopoly OAO Gazprom and state-controlled oil company OAO Rosneft, which became the third-biggest oil producer overnight after acquiring Yuganskneftegaz, will acquire remaining assets in the course of the liquidation. Both companies are being primed as national champion energy companies capable of competing with the likes of Exxon Mobil Corp. and Saudi Arabia's Aramco.