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Santos says gas tax proposal caused reputational damage to Australia
Santos' head said that Australia's reputation for being a stable destination for energy investments was damaged by the proposal to impose 25% tax on gas exports, even after the federal government had backed away from it. Kevin Gallagher, CEO of Santos, said that the tax proposed by lawmakers was motivated by "activism", rather than by economics. He said that "common sense" prevailed when the centre-left Labor Government backed away from the tax proposal. He warned that the prospect of taxing energy projects with long-term lives had unnerved foreign investors. He said that repeated interventions and 'threats of changes' had created anxiety among foreigners, on whose capital Australia relies to fund large oil & gas developments. He said that capital flows to countries where they feel "welcomed and safe", and instability of policy could divert investments elsewhere. Gallagher, speaking at an event in Sydney, said: "It is impossible to underestimate the damage done." Gallagher reiterated his concerns that global markets had underpriced geopolitical risks, stating that investors hadn't fully factored the potential volatility of the?U.S. and Israeli war against?Iran. He warned that expectations of a rapid resolution were overly optimistic. The conflict could continue, "delaying the stabilisation of markets and keeping commodity prices volatile as strategic reserves will eventually need to be built up." He said: "There is a belief that everything will return to normal very quickly. The markets will be balanced, and everything will return to normal." "I don't think so." (Reporting and editing by Thomas Derpinghaus; Byron Kaye)
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Gold recovers from a five-week low, but inflation worries cap gains
Gold prices rose on Tuesday, but gains were modest as crude oil prices remained high and inflation fears remained alive. After a drop of more than 2% on Monday, spot gold increased 0.3% by 0417 GMT to $4,533.40 an ounce. U.S. gold futures for delivery in June rose 0.2% to $4,542.50. Ilya Spirak, the head of global macro at Tastylive, said that prices seem to have digested a little after the return of "war trade" across markets on Monday. Gains were however capped by the rise in Treasury "yields" and the dollar as an increase in crude oil stoked inflation concerns. Spivak stated that this weighed against gold, which is non-interest bearing and anti-fiat. Brent crude was hovering?above $113 per barrel, as the U.S. continued to negotiate a truce with Iran while exchanging blows in the Strait of Hormuz. The U.S. Military said Monday that it destroyed six Iranian small vessels and intercepted Iranian drones and cruise missiles, as Tehran tried to thwart the new U.S. Naval effort to?open shipping through Strait of Hormuz. Dollar-priced materials become more expensive to holders of currencies other than the U.S. dollar. While higher crude oil prices can increase inflation, they also increase the probability of higher interest rates. Gold is a good inflation hedge but high interest rates can make other assets more appealing. Markets now see a 37% chance that the U.S. interest rate will increase by March 2027 compared to 27% a week ago. Investors are now awaiting a number of important U.S. data this week. These include job openings, the ADP employment report and April payrolls. Silver spot was unchanged at $72.73, platinum rose 1% to $1964, and palladium gained 0.8%, reaching $1,492.27. (Reporting and editing by Rashmi aich and Subhranshu Sahu in Bengaluru.
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Indian shares fall, rupee falls to record low due to high oil prices
On Tuesday, Indian shares dropped and the rupee reached a new low as investors assessed March-quarter earnings. As of 9:56 a.m. IST, the?Nifty 50 index was down 0.45% to 24,010.20 and the BSE Sensex fell 0.41% at 76.954.34. The rupee has reached a new low. Brent crude soared to an intraday peak of $115.3 per barrel on Monday, after Iran intensified?attacks against the UAE and vessels in the Middle East Gulf region, including several in the Strait of Hormuz. Oil prices remain high despite the fact that they have dropped to $113 early on Tuesday due to a'signal the U.S. Navy will loosen Iran's closing of the Strait. The third largest importer of crude oil in the world, higher?prices for crude are negative as they increase inflationary pressures. They also drag down economic growth and corporate profits. The resumption in hostilities along the Hormuz Strait, and the subsequent rise in oil prices, are headwinds to the markets, said VK VK Vijayakumar. He added that the rupee's slide is not favourable for foreign?flows. The foreign outflows of Indian equity have already exceeded the 2025 record outflows. Twelve of the sixteen major sectors posted losses on?the day. Small-caps and mid-caps, which are broader, were less affected. Financials dropped 0.75%. The top two stocks of the benchmark indexes, HDFC Bank and ICICI Bank, each fell 1%. Larsen & Toubro lost 1.3% before its quarterly results, later that day. Drugmaker?Wockhardt has risen 10.5% in the March quarter after swinging into a?profit. After reporting a profit increase of more than twice as much in the fourth quarter, Realtor Sobha rose 3.6%.
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What is freedom? What is freedom?
Rae Wee gives us a look at what the European and global markets will be like tomorrow. The operation "Project Freedom", led by U.S. president Donald Trump, hasn't started off well. The U.S. flagged Alliance Fairfax, operated by Maersk, may have left the Gulf via the Strait of Hormuz with U.S. Military assets. The U.S. also claimed to have destroyed six small Iranian boats. An oil port in United Arab Emirates that hosts a large U.S. base was also set on fire by Iranian missiles. Seoul's Foreign Ministry said, however, that the authorities would investigate the cause of the fire on a South Korean operated ship in the Strait. Shipping?in the Strait of Hormuz is largely at standstill. Tuesday's markets were in a precarious state due to the fragility of the U.S./Iran ceasefire. Stocks in Asia fell and oil prices remained well above $100 a barrel. The Westpac Banking Corporation in Australia was the latest to warn of the dangers posed by the Middle East conflict, after reporting lower than expected?first-half profits. The global energy crisis is causing governments in Asia to suffer more and more as they scramble to find alternate fuel sources in order for their economies not be affected by the worst. Data on Tuesday revealed that the Philippine's annual inflation rate accelerated to its highest level in three years in April. A surge in fuel prices raised the possibility of further policy tightening. The earnings season has also begun, with the likes of Pfizer and AMD set to announce their results later that day. S&P Global Market Intelligence data shows that 83% of S&P500 companies have already released results and have beaten their EPS estimates. 78.2% also exceeded their revenue estimates. A number of 'central bankers from the Bank of England and the European Central Bank, as well as the Federal Reserve, are due to speak at various events. This follows the policy meetings last week, where several turned more hawkish. Tuesday's key?developments: Sam Woods, Bank of England speaks Christine Lagarde, Philip Lane and the European Central Bank speak Michael Barr, Federal Reserve and Michelle Bowman talk - Earnings from AMD, Pfizer KKR PayPal AMC Entertainment Job openings in the U.S.
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PMI: Growth in the UAE's non-oil private sectors slows down as Iran War weighs on it
A?survey on Tuesday showed that the UAE's private non-oil sector expanded at the slowest rate since February 2021, as the Iran War?hammered tourism and shipping, impacting sales and exports. The S&P Global Purchasing Managers Index for the UAE fell from 52.9 to 52.1, but remained in growth territory over 50. The subindex fell to 52.5 from 54.5 in March, the lowest reading in over five years. The drop in foreign sales, excluding the pandemic season, was the biggest since the survey started in August 2009. The output still increased?strongly but at a slower pace. This was helped by the existing infrastructure and project work. The purchasing growth was'modest' as high costs, weak sales, and supply constraints slowed demand. David Owen, Senior Economist at S&P Global Market Intelligence, said: "The non-oil sector in the?UAE?showed a further decline in momentum during April. Operating conditions showed their lowest performance since more than five year," "That said... the strength of the non oil private sector, as highlighted by yet another increase in output, means that companies expect to see growth continue for the next twelve months." The International Monetary Fund said in April that energy disruptions caused by the Iran War will have a 'heavy impact' on the economies of Gulf oil and natural gas exporters. In April, the UAE experienced a sharp increase in price pressures. Input cost inflation reached its highest level since July 2024 and sales prices rose at their fastest rate since June 2011. Expectations for the coming year have risen to a 3-month high. The headline PMI for Dubai, the region's main business and tourism center, fell to 51.6 from 53.2 in march, a 55 month low. However, more firms expressed optimism regarding a recovery of demand conditions in general. (Reporting and editing by Hugh Lawson; Staff Reporting)
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Indian shares open lower due to rising oil prices; rupee falls to record low
Indian shares opened lower on Tuesday, as investors assessed March quarter corporate earnings and a rise in 'crude oil' prices due to the Middle East conflict. As of 9:15 a.m. IST the Nifty 50 index was down 0.28% to 24,052.60 while the BSE Sensex fell 0.21% to 77,103.72. Brent crude soared to a intraday high of $115.3 per barrel on Monday, after Iran increased its attacks against the UAE and vessels in the Middle East Gulf region, including several in the Strait o'Hormuz. Oil prices remain high despite signs that the U.S. Navy may be easing Iran's strait closure. The world's third largest importer of crude oil is negatively affected by higher prices, which add to inflationary pressures. They also drag down economic growth and corporate earnings. At the opening, 11 of 16 major sectors fell. Small-caps and mid-caps both fell by 0.1% and 0.3% respectively. The rupee fell to a record low after U.S. and Iranian strikes in the?Gulf rattled?markets and dampened expectations of a peaceful resolution.
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Philippine inflation at three-year high confirms rate hike path
Philippine annual inflation increased to a 3-year high in April as fuel prices surged?as a result of the Middle East conflict, raising the possibility of further policy tightening. The statistics agency announced on Tuesday that consumer prices increased 7.2% last month. This is the highest rate since March 2023. This was higher than the median forecast of 5.5% in an economist poll. The central bank had forecast a range between 5.6% and 6.4% for April. Emilio Neri is the lead economist for Bank of the Philippine Islands. He said the BSP might be forced to hold another off-cycle and raise rates in order to stem inflation. "Yes, we will not rule out a strong intermeeting increase." In this volatile environment, we can't rely solely on the supply-side?solutions. Because the Philippines is heavily dependent on Middle -East oil, it is vulnerable to price fluctuations and supply shocks during times of geopolitical conflict. The average inflation rate for the first four month of this year is now 3.9%, increasing the pressure on the Philippine Central Bank as it nears the upper limit of their 2%-4% range. According to government data, diesel inflation rose by 122.7 percent and gasoline inflation by 60 percent in the last month. The statistics agency reported that higher food, transportation and utility costs were also responsible for the increase in consumer prices last month. The inflation rate was 2.6% on a monthly basis, which is the highest since 26 years. The 'Bangko ng 'Pilipinas raised its interest rate last month to 4.50% in order to curb rising inflation. They warned that inflation would likely reach 6.3% by the end of this year. Governor Eli Remolona hinted at the possibility of a further rate increase to combat price pressures. The next meeting of the central bank's policy committee will be held on June 18. The last 'off-cycle' meeting was held on March 26. It was the first Asian central bank to hold one. Last month, the annual core inflation rate (which excludes volatile energy and food prices) was 3.9%.
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Gold recovers from a one-month low, but inflation worries cap gains
Gold prices increased on Tuesday after a session low of more than one month. However, gains were 'limited' by high oil prices, which kept inflation concerns alive and impacted the outlook for U.S. rates. As of 0230 GMT, spot gold was up by 0.5%, at $4,541.39 an ounce. In the previous session, gold fell by more than 2% and reached its lowest level since last March 31. U.S. Gold Futures for June Delivery rose?0.4% at $4,550.70. Ilya Spirak, global macro head at Tastylive said that prices are settling down after the return to the "war trade" across the markets sent gold lower on Monday. Gains were however capped, as "yields" and the dollar rose as crude oil's rebound stoked inflation concerns. This weighed against gold that was not interest-bearing or anti-fiat, said Spivak. Brent crude oil was hovering above $113 per barrel, as the U.S. continued to negotiate a truce with?Iran while exchanging blows in the Strait of Hormuz. Dollar-priced materials become more expensive to holders of currencies other than the U.S. dollar. While higher crude oil costs can increase inflation, they also increase the probability of higher interest rates. Gold is considered a hedge against inflation, but high interest rates can make other assets with higher yields more appealing, which reduces its appeal. Markets now see a 37% likelihood of a U.S. Federal Reserve hike in March 2027 compared to 27% who expected a rate reduction a week ago. U.S. and Iran launched new attacks in the Gulf on Sunday as they fought for control of the Strait of Hormuz through maritime blockades. This shook a fragile ceasefire. The?U.S. The?U.S. Investors are now awaiting a number of important U.S. statistics this week. These include the ADP Employment Report, April payrolls data, and U.S. Job Openings. Silver spot edged up 0.4% to $73.03 an ounce. Platinum gained 1.3% at $1,970.85 and palladium rose 1.2% to $1,497.91.
Chilean copper miner Codelco and contractors fined following deadly mine collapse
According to inspection records obtained through public record requests, Codelco, a state-owned copper miner in Chile, was fined by the labor authorities for last year's fatal collapse of its El Teniente Mine. Three contractors, whose employees were killed or injured, were also sanctioned.
Six contract workers were killed and others injured in the aftermath of the underground?seismic occurrence that occurred on July 31, triggering a rock explosion at El Teniente - the largest underground copper mine in the world.
The files were obtained by requesting open records from the Chilean labor ministry. These fines in Chile are communicated directly to the employers, and they can be contested or reduced administratively. However, they are not usually disclosed publicly.
During the accident, the then-Labor minister Giorgio Boccardo stated that his office, along with the mining regulator Sernageomin would investigate whether there had been any violations of labor safety rules.
A quake measuring about 4.3 on the Richter scale halted all underground operations in the vast mine complex, despite rescue efforts and safety checks.
Codelco incurred a large production cost as a result of the collapse. The company said that the slow restart of El Teniente underground operations and the shutting down of those operations resulted in a reduction of copper production by tens or thousands of tons. This caused a disruption of shipments during a period of limited global supplies.
The accident also highlighted the geotechnical hazards facing Chile's old underground mines.
Contractors fined more than CODELCO
The records reveal that the three contractors received fines totaling about $87,000, while Codelco only paid out $20,000, reflecting Chile's "split liability framework" for subcontracted works.
Chile's labor law states that while the principal company, Codelco, can be punished for safety violations, contractors are directly liable as employers, for reporting accidents, risk assessments, worker assignments, and other compliance obligations.
Labor inspectors found that Codelco did not have a written procedure showing how seismic warnings are used to determine whether or not work should be stopped.
According to a separate record of sanctions, after the accident, regulators found that Codelco had violated labor laws when workers were seen entering or preparing for entry into underground areas, while the mine suspension was still in effect.
According to Chilean labor laws, serious or fatal accidents can result in fines of up to 150 UTM (a Chilean tax unit linked to inflation) or approximately $11,000 today. A company was fined 340 UTM, or roughly $26,000 today, after a fatal accident on a construction site in 2007.
Workers' safety specialists and labor advocates have questioned if such small penalties are enough to deter major employers.
In 2011, after a mining accident, a Chilean House of Representatives investigation commission reported that it was essential to increase the fines to deter mining companies from violating safety regulations.
Since then, proposals to increase fines for workplace accidents that are serious or deadly have failed.
CODELCO DETAILS CHANGES
Codelco said that since the collapse it has tightened safety procedures to restart work at El Teniente. This includes adding safety briefings before shifts begin, improving communication underground, increasing checks on worker's locations, and reviewing protective gear.
Later, it was revealed that an independent panel headed by a former Anglo American chief executive officer was investigating what caused the accident. They were also looking at whether management problems or workplace issues played a part.
Codelco stated in a statement to that the seismic alert system had been activated on the day of accident and that they have appealed against the fine imposed by the Labor Ministry.
The company said that a "legal proceeding is ongoing related to the supervision of worker entry during work stoppage", and it was waiting for a ruling from the authorities.
Codelco announced in August that El teniente?mine director Andres Musik would be leaving his position. In February, three senior executives were sacked after an internal audit revealed inconsistencies or concealment in the aftermath of a rock explosion at the mine several years ago.
SUBCONTRACTORS WILL GET LARGER FINES
Zublin, a Strabag subsidiary, was among the three firms that were fined. This is because Zublin failed to report an injury to a worker within 24 hours.
The report stated that it is important to immediately notify the authorities to ensure safety for remaining workers.
The Austrian company refused to comment on a request.
SalfaCorp, a Chilean construction company, also sanctioned a unit after one of their workers died at the Andesita mine sector. Inspectors found that the company did not immediately notify authorities of the fatal accident, among other violations.
SalfaCorp stated in a press release that "internal protocol have been reviewed and strengthened to further strengthen safety standards and compliance in all of its operations."
The company said that the sanctions related to the reporting process and labor requirements, and had nothing to do with the cause of the accident.
The Chilean labor regulator fined Constructora Gardilcic as well, the unlisted contractor who's workers were killed and injured at the Recursos North area of the mine.
Inspectors found that the company failed to report the accident on time, filed injury reports late and had a poor safety plan.
The authorities also found that Gardilcic failed to adequately account for the risks of violent rock explosions outside designated danger areas and placed some workers into jobs they weren't cleared to perform.
Gardilcic didn't immediately respond to an inquiry for comment.
LONG ROAD Ahead
Codelco said that the areas most affected by the accident would remain under strict restrictions as criminal, regulatory and technological investigations continue.
The company has promised a gradual restart that will be approved by the regulator, but it is unclear when normal operations can resume at the mine. (Reporting and editing by Christian Plumb, Aurora Ellis, and Kylie Madry)
(source: Reuters)