BHP expects iron ore price to drop again

Global miner BHP Billiton does not expect the current revival in iron ore prices to last long.


BHP’s president of mining operations in Australia, Mike Henry, says stronger prices may last for a few months but then retreat again.

Mr Henry told the Melbourne Mining Club on Thursday that there is still lots of low-cost iron ore to work its way through the market.

The price of iron ore has lifted about 50 per cent in the past three months to more than $US60 per metric tonne.

Mr Henry said there has been a lift in demand for steel in the Chinese construction industry, which had helped boost iron ore prices, but that was partly seasonal and followed a period when stocks of steel and commodities had run down to a very low level.

So as the construction industry lifted, there had been an improvement in demand for steel, higher steel margins, and more demand for commodities such as iron ore, which had pushed prices higher.

“But as we’ve said many times before, there’s lots more low-cost volume to come to market,” Mr Henry said.

“We think that there is a slowing in growth for steel demand and steel production in China that means that over time we’re not forecasting that we’re going to see the sorts of prices we’ve seen for iron ore or coking coal for that matter.

“So I think we’re going to see this curve (price rise) for a few months but things will come back off again.”

Mr Henry told reporters that even if China reduced its steel-making capacity, it wouldn’t stop iron ore prices from coming down because remaining steelmakers would become more efficient.

“There is simply too much potential there to bring more low-cost supply to market either through productivity or new investments,” Mr Henry said.

Nonetheless, Mr Henry added, if BHP Billiton has its cost structure right, it will still have a fantastic business generating healthy margins.

He said BHP would be driving hard to improve productivity irrespective of what was happening with prices or the value of the Australian dollar.

Target stores facing a smaller future

Struggling retailer Target will live on but its worst performing stores are set to be rebirthed – as Kmart stores.


The company behind the discount chain, Wesfarmers, has rejected pressure to replace Target with its more successful department store business, Kmart.

Instead, it plans to have fewer but stronger Target stores and more Kmart outlets, Wesfarmers chief executive Richard Goyder says.

“We will continue to operate both businesses in the market,” he said.

“We have a strong pipeline of new stores going to open for Kmart in coming years and we are not planning on opening as many new Target stores.

“There will be some Target stores converted into Kmart, and probably some Kmarts converted into Target, but I would expect over the next five years that the representation will be greater Kmart stores than Target.”

Target currently has more than 300 stores in Australia, while Kmart has more than 200 stores in Australia and New Zealand.

Two loss-making Target stores have already been converted into Kmarts.

Wesfarmers created a single department stores division to oversee both Target and Kmart in February, headed by former Kmart boss Guy Russo, fuellimg speculation the two retailers would be merged.

Mr Goyder said there would always been an overlap in what Target and Kmart offered, and hinted at possible category changes for Target.

Sales figures for the three months to March show Kmart continued to outperform Target, with its like-for-like sales rising 15 per cent to $1.1 billion.

Target suffered a fall of 0.8 per cent in like-for-like sales to $678 million, with womenswear, underwear and homewares the worst performing items.

There’s no immediate signs of improvement, with Target expected to suffer from higher clearance activity in the final quarter of 2015/16 due to a backlog of summer stock, and the added risk of excess winter stock due to unseasonably warm weather.

The embattled retailer’s head office, tainted by an accounting scandal where supplier rebates were used to artificially boost its half year results, is also set to be relocated from Geelong to Melbourne, and Mr Goyder confirmed there will be a number of job losses.

More details on Target’s turnaround plan will be revealed by Wesfarmers in a strategy day on June 22.

Why phages could be the new weapon in the war against antibiotic resistance

Ville Friman, University of York

Every year an increasing number of health tourists are travelling to Eastern bloc countries to receive an old Soviet medical treatment, which could be the answer to the West’s crisis in antibiotics.


Receiving life saving medical treatment a long way from home is never ideal, but for many of these patients phage therapy is the last in a long line of previously unsuccessful remedies used in the fight against chronic bacterial infections – which conventional Western antibiotics have been unable to shift.

Phage therapy – the use of bacteria-specific parasitic viruses to kill pathogens could offer a viable alternative to deal with multi-drug resistant infections.

Viruses that kill bacteria may sound like something out of a sci-fi film but phages have been used in this way for decades in Russia and Georgia – neither of which have the same issues surrounding antibiotic resistance that we do.

It is this rapid rise of antibiotic resistance that has led the Western world to look to Georgia in a bid to find new ways to control bacterial infections.

What causes antibiotic resistance?

While the benefits of phage therapy were discovered over 100 years ago it didn’t become a noteworthy treatment strategy in Western Europe due to the discovery of the “miracle drugs” that are antibiotics and their widespread roll out and mass production during World War II.

Unlike antibiotics, phages are also much more specific and effective only against certain strains of pathogenic bacteria. For phage therapy to work, the doctor would need to know which bacterial species is causing the disease or infection so the right phage species can be chosen – which isn’t needed with antibiotics.

They might look like an alien species, but these bacteria-eating viruses could be the next big thing in the fight against infectious diseases. nobeastsofierce/Shutterstock

The specific nature of phages, combined with a lack of understanding of their basic biology, led to inconsistent treatment outcomes. This was then used by critics as a counterargument against it.

While some progress was made after World War I between pioneering phage scientists Felix D’herelle and George Eliava , their plans to open a large phage therapy centre in Georgia was trumped by Stalin and the generally suspicious political climate of the time prior to World War II.

As a result, phage therapy became the “forgotten cure” for several decades until it was found again 40 years later by new generations of scientists and investors.

Killer cure

Things have changed massively since the early days. For a start we now understand phage and bacterial biology much better than ever before and phage bacteria interactions have greatly improved our understanding of molecular biology in general.

We also know that phages can work together with antibiotics to kill bacteria more efficiently – with a number of successful phage therapy case studies conducted both across the Atlantic and in Europe.

Phages: the forgotten cure? borzywoj/Shutterstock

We also now understand more about phage evolution and its potential role in infections. For example, even though pathogenic bacteria can evolve resistance to phages as they can with antibiotics, phages differ from antibiotics in being able to evolve to be more infective.

How phages do this is still unclear, but this method has a long history and means that phages retain their long-term effectiveness via natural selection. Phages can also be improved, or “trained” as it was called in Georgia during the early days, to become more infective to target pathogenic bacteria.

Phages are also one of the most abundant groups of organisms on the Earth, they can be found everywhere and have especially high densities in sea water, which makes it relatively easy to isolate new phages for clinical use.

Back to the future

So how close are we to being able to use phages clinically? Well, we can use them under the Helsinki declaration (a set of ethical principles regarding human experimentation developed for the medical community) to try out alternative treatments as a last resort if anything else does not work. And people can of course also travel to Georgia and seek treatment directly at the Eliava Phage Therapy Center. But otherwise phage therapy is not yet a standard medical practise in Western Europe.

Current research is focusing on developing good manufacturing protocols for preparing medicinal phage products that are safe for human application.

Double-blind clinical trials that compare the effectiveness of phages and antibiotics in treating burns victims are also currently under way in France run by the European Union-funded phagoburn project.

The trials will look at how phages work in comparison to antibiotics in the treatment of skin infections caused by escherichia coli and pseudomonas aeruginosa bacteria in burn patients.

It is hoped that ongoing clinical trials such as the this and increasing scientific evidence will help to pave the way towards acceptance of phage therapy.

Crucially, public opinion and the political climate could be more receptive this time given the urgent need to find alternatives for antibiotics to treat bacterial infections.

The use of other “strange” treatments such as faecal transplant to treat bacterial gut infections has now been publicly accepted in various European countries including the UK due to strong clinical evidence and high treatment success rates. So maybe in time the idea of viruses drawn from sea water being used to treat chronic bacterial infections may not seem to alien after all.

Ville Friman does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

Westconnex Sydney tunnel gets green light

Construction on the next stage of Sydney’s WestConnex project could begin within weeks after the NSW government approved a plan to build a “New M5” in the city’s inner-west.


The 9km tunnel will run between the existing M5 East at Kingsgrove and a new interchange at St Peters and is intended to reduce congestion and improve travel times, Planning Minister Rob Stokes says.

Local roads will be upgraded and a new green space will be created south of Sydney Park as part of the development, he said.

The WestConnex project has faced growing opposition from local councils, community groups and residents with thousands of submissions specifically lodged in response to the environmental impact statement for the second stage of the development.

On Thursday, several members of the WestCONnex Action Group also staged a protest outside the Department of Planning and Environment offices in Sydney.

Mr Stokes said the government would impose several strict environmental protections in direct response to the issues raised by the community.

These include building new and upgraded cycling and pedestrian pathways connecting existing open spaces, imposing strict air quality limits for the tunnel and ventilation facilities and a net increase in trees in the area as a result of the works.

The new tunnel would double capacity of the existing M5 East corridor, Roads Minister Duncan Gay said.

“For example, in 2021 travel times will be cut by up to 45 per cent for motorists travelling eastbound during the morning peak from Beverly Hills to Botany,” he said on Thursday.

Mr Gay said initial work on the tunnel project, which is due to open in 2019, could begin within weeks pending federal government approval.

No more ‘drama’ over executions: Indonesia

The “drama” and “commotion” that surrounded the executions of drug traffickers, including Australians Andrew Chan and Myuran Sukumaran, in Indonesia last year should not happen again, the country’s security minister says.


Attorney-General HM Prasetyo flagged earlier this month that executions in the country were likely to resume this year following a brief suspension because of economic reasons.

While not making any announcement as to when this will occur, Security Minister Luhut Panjaitan told reporters on Thursday that “there shall be no more ‘sinetron'” – referring to a soap opera or drama – when executions resume.

“In my opinion, that’s not proper … In my opinion, don’t make it a commotion,” he said.

Last year, Indonesia executed 14 people by firing squad – six in January and eight others in April, including Chan and Sukumaran.

In the lead up to the Australians’ executions, there was intense foreign media attention and diplomatic pressure on Indonesia, as well as strident international appeals and pleas from family members.

Their executions were initially announced in February and as the day grew closer two months later, there was speculation as to when the punishment would actually occur.

Luhut said this year he would like to see “less talking”, and noted the law stipulated Indonesia only needed to give three days’ notice as to when an execution was going to take place.

Drug use remains a scourge in Indonesia and perhaps presents more of a challenge than terrorism, Luhut told reporters.

Demand for the drug ice increased 280 per cent last year, he added.

Asked whether executions were therefore effective in reducing drug use, he said: “We like to evaluate from time to time what is the best for Indonesia. We will see maybe in two or three years what is the result.”

The attorney-general’s office has previously said it has the budget to execute 14 prisoners in 2016.

Merrin still finding his feet at Penrith

He’s the NRL big name signed on big money, but Trent Merrin has yet to bring his big game.


The NSW State of Origin and Kangaroos star believes he has yet to reach the levels at his new club Penrith that controversially drew him away from St George Illawarra over the summer.

“I’m getting there, most definitely,” Merrin said on Thursday.

The 26-year-old was trumpeted as a major signing over last season, a key piece to Panthers supremo Phil Gould’s puzzle that would help transform Penrith from NRL lightweights to heavyweights.

But with the mountain men sitting 10th on the ladder almost a third of the way through the season, Merrin concedes he’s still trying to find his feet at the new digs.

“It’s tough coming to a new club and trying to adjust and getting the rhythm of things,” he said.

“But I’ve adjusted really quick. It’s been great having these sort of players around me to feed off.

“I think I’ve scored more tries in the first opening rounds than what I’ve ever done – so that’s a positive.”

Merrin is content with his current output, averaging 140 metres from 15 runs, together with 25 tackles, in 58 minutes a game.

But it’s still a far cry from when he would easily clock 80 minutes at the peak of his powers.

“I feel like I’m doing my job for the team – that’s the main thing,” he said.

“I just wanted to lead by example in the middle and come to a new club and do the best I can.”

The Panthers meet the third-placed Sharks, who Merrin believes have yet to be really tested through the opening matches of the season.

“I don’t think a team’s really challenged Cronulla like that and put them into a really grinding game … our main focus is just excelling in what we’ve been doing the last few weeks,” he said.

Jail for people smuggler ‘sends a warning’

A 10-year prison term recently handed to a people smuggler who helped organise a boat carrying 50 illegal arrivals to Australia sends a clear warning, the immigration minister says.


Iraqi-born Hosiene Mohamed, 44, was extradited to Perth from Germany to face trial and was convicted in February of organising at least five non-citizens to come to Australia.

The Royal Australian Navy intercepted SIEV 185 at Ashmore Island in September 2010 and found 56 people onboard, including four Indonesian crew and passengers predominantly from Kuwait and Iraq.

They were all taken to Christmas Island where seven of them identified Mohamed as the person they dealt with to come to Australia.

WA District Court Judge Richard Keen said in sentencing that the people were under stress and in danger in their own country, and some gave evidence of being arrested and beaten.

“They were persecuted because of their backgrounds or religious or political beliefs,” he said.

“They had to leave their country, otherwise they would be imprisoned, tortured or may even be killed.”

The court heard the price to get to Australia was between US$6500 and US$8000.

Judge Keen said Mohamed’s pseudonym of Sayed Hadar was well known as the “go-to man” and it “beggars belief” that the seven people who testified about dealing with him were the only ones.

Mohamed obtained a visa to come to Australia in 2007 and was later given residency in Australia after he was jailed and severely tortured in Iraq for 20 months for becoming involved in an organisation that worked against the Saddam Hussein regime.

“It must have been a great relief for you to be accepted in this country. However, you have abused that sanctuary and hospitality,” Judge Keen said.

Mohamed was sentenced to a minimum of seven-and-a-half years behind bars.

There are currently 18 people serving a sentence in Australian prisons for people smuggling.

Immigration and Border Protection Minister Peter Dutton said on Thursday that the case showed the success of Operation Sovereign Borders.

“This sentence highlights the seriousness of the illegal people smuggling trade and further reinforces our determination to pursue those involved,” he said.

Ten hails Foxtel deal as revenue rises

Ten Network’s partnership with Foxtel has helped cut the free-to-air broadcaster’s underlying half year loss by 21 per cent.


Ten’s revenue rose eight per cent in the six months to February 29 to $350 million, due mainly to its new relationship with Foxtel advertiser MCN.

That trimmed Ten’s underlying loss to $10.4 million, from the previous year’s $13.2 million.

With the sale of Ten’s US outdoor advertising business included, the company made a half year net profit of $13.4 million, a massive improvement on the previous year’s $264 million half year loss.

Chief executive Paul Anderson said Ten achieved its strongest first half revenue performance since 2012 due to the sale of TV, catch-up and digital advertising through MCN, in which Ten bought a 25 per cent stake in 2015.

“February 2016 marked the 12th consecutive month in which Ten had increased its revenue and revenue share year-on-year,” he said.

“Our relationship with MCN is innovative and it is changing the way advertising is bought and sold in Australia.”

Ten said its share of television revenue rose 2.5 percentage points between September and February, almost exactly accounting for a combined 2.4 point decline for rivals Seven and Nine.

Despite soft conditions in the capital city free-to-air TV market, Ten expects its ad revenue to rise by about eight per cent in March and April.

Ten said its net debt has been cut to $20.2 million following the capital injection it received from Foxtel taking a 14.99 stake in October.

The company’s loss in the same period a year earlier was caused mainly by a big writedown in the value of its broadcast licence, and Mr Anderson has once again urged the government to slash or scrap the licence fee.

“Without a meaningful reduction in this budget, the free-to-air television industry will be forced to look at reducing costs further, which will mean cuts to Australian programming and, inevitably, job losses at Australian television production companies,” he said.

“That would be a terrible outcome for everyone, particularly Australian viewers.”

Shares in Ten closed down 0.5 cents at $1.005.


* Net profit of $13.4m, compared to $264.4m loss

* Revenue up 7.8pct to $349.6m

* No interim dividend, unchanged

Bennett, Maguire want golden point gone

Wayne Bennett doesn’t want to see another grand final won, or lost, in the same manner as the 2015 decider, calling for the NRL to scrap the extra-time approach for this season’s playoffs.


The Brisbane coach has been a long-term critic of golden point.

He restated that opposition in the immediate aftermath of the 2015 grand final, in which Johnathan Thurston nailed the title-winning field goal shortly after Ben Hunt knocked the ball on from the start of the golden-point period.

“We have to address it. One point and one set can’t lose a major game in the playoffs or the grand final – it can’t happen,” Bennett said on Thursday at Broncos training at Red Hill.

The decision will be discussed at a meeting next month as momentum grows for golden point to be punted from the playoffs. It could still remain as part of the regular season, though.

“The regular season is a whole lot different to the playoffs. There is a huge amount at stake in the playoffs; you want to be fair as you can with both teams,” Bennett said.

“The 1989 grand final was the last time they probably used extra-time and that was a great game of football, a great spectacle,

“Everyone’s playing extra-time in all codes across the world now. No one is relying on one moment and, all of a sudden, you have won the game.

“I realise the game has to be finished that night. We have to find a way to finish it fairly to all involved.”

Souths coach Michael Maguire, who replaced Bennett on the NRL’s competition committee earlier this year, also wants golden point eradicated from the playoffs.

“I haven’t spoken to (NRL CEO) Todd (Greenberg) and those guys on the committee but, around the finals, I do agree with what a lot of the coaches are saying. It is a game you want to play out to work out who wins rather than having it determined by that one point,” Maguire said.

Stokes says competitive battles get his ‘juices flowing’

“I’m always thinking about the private battle, even in the field.


I’m always trying to be better than the other person I’m against,” the 24-year-old told the Times newspaper on Thursday.

“There are guys that you look at and you want to really bowl at them or bat against them, certain guys who really get your juices flowing. They tend to be similar characters to me: (Australia batsman) David Warner, for example.

“I love playing against these guys who have the same attitude to the game that I have. It’s always been there, that competitive instinct… I just want to win.”

By claiming four wickets and five catches at the World Twenty20 in India, Stokes played a crucial role in England’s run to the final in Kolkata on April 3, especially with his bowling at the death.

However, in the last over against the West Indies, who needed 19 runs to clinch their second T20 World Cup, Stokes was hit for four successive sixes by Carlos Brathwaite, ending England’s own hopes of a second triumph in disastrous fashion.

While Stokes admitted he was “devastated”, he also claimed his growing maturity as a player helped him deal with the situation with a better frame of mind.

“I just sat there with a towel on my head, utterly devastated. I didn’t want to walk out there slumped and beaten and looking like I felt inside,” Stokes said.

“A few years ago, I would have really tortured myself about that final over. I used to find it so hard to let go, but I’m a lot better now.

“You can never beat your own mind when it plays tricks on you. I’m learning to cope a lot better with the bad times now.”

(Reporting by Shravanth Vijayakumar in Bengaluru; Editing by John O’Brien)