Australia’s four major banks, Commonwealth Bank (ASX: CBA), ANZ (ASX: ANZ), Westpac (ASX: WPC) and NAB (ASX: NAB) have responded to the Reserve Bank of Australia’s (RBA) actions this week by following suit in a complete interest rate rise for customers.
On Tuesday morning, the RBA boosted the cash rate from a record low 0.1% to 0.35% following on from a board meeting.
RBA Governor Dr Phillip Lowe has warned further interest rate rises should be expected in the coming months as, without them, inflation could grow substantially.
“The board judged that now was the right time to begin withdrawing some of the extraordinary monetary support that was put in place to help the Australian economy during the pandemic,” he said.
Experts believe heavy inflation is the reason the rate is rising for the first time in more than 10 years.
Commonwealth Bank was the first of the major players to announce its plans to pass on the full 0.25% increase, with ANZ and Westpac following suit shortly after, followed finally by NAB.
Qantas (ASX: QAN) has reached an agreement this week to fully acquire Alliance Aviation Services in an effort to better compete in the charter flight segment.
In buying Australia’s biggest fly-in, fly-out (FIFO) charter operator, Qantas chief executive officer Alan Joyce says bringing the two companies together will benefit the company’s planning and training facilities.
“It makes a lot of sense for us to combine with Alliance to improve the services we can offer, which is a positive for both airlines as well as the travelling public,” he said.
After buying just under 20% of Alliance in 2019, Qantas finally completed its goal of acquiring the whole airline.
The new takeover agreement still requires a vote from Alliance shareholders and regulators such as the Australian Competition and Consumer Commission (ACCC).
QBE (ASX: QBE) has announced this week it’s anticipating a whopping $100 million hit as a result of the devastating Russia-Ukraine crisis which continues to unfold.
QBE chief executive officer Andrew Horton says while the physical impacts and deaths are the main concern, there are also severe financial concerns for companies across the globe.
“QBE currently expects to have some exposure to the broader conflict through a number of lines such as political violence, political risk, and aviation [insurance],” he said.
“The potential net impact for QBE was estimated at US$75 million (A$103 million).”
The areas of insurance that are impacted include ‘political violence’ and ‘political risk’, which safeguard businesses from losses subject to war on land, confiscation and expropriation, political violence and terrorism.
Core Lithium (ASX: CXO) is set to award the crushing contract for the Finniss lithium project in the Northern Territory to CSI Mining Services.
The Finniss project resides within one of the most prospective areas for lithium in the NT, the Bynoe pegmatite field.
Core Lithium managing director Stephen Biggins says the contract award is a significant step in the right direction for the company.
The company is working to bring the cornerstone project online and deliver its first batch of spodumene concentrate before the year’s end in a bid to become Australia’s next lithium producer.
“Core staff have done a great job getting the site ready for CSI to start work next month,” he said.
Liontown Resources (ASX: LTR) this week announced its signing of an offtake deal with LG Energy Solution, supplying LG with spodumene concentrate from Liontown’s Kathleen Valley lithium project in Western Australia over five years, commencing in 2024.
In terms of the deal, LG will purchase 100,000 dry metric tonnes of spodumene concentrate in the first year, before increasing to 150,000Mt per year thereafter.
Liontown’s managing director and chief executive officer Tony Ottaviano says the company is “delighted” to have entered into the offtake agreement.
“This establishes the foundation for a long-term partnership, and we are proud that we will be supplying lithium from the Kathleen Valley project to LG, a respected global leader in the lithium battery value chain,” he said.
Liontown has the option to extend the agreement for a further five years at the conclusion of the current one.
Rio Tinto (ASX: RIO) chief executive officer Jakob Stausholm raised fresh concerns this week over fears that Australia is stalling in its efforts to build renewable energy.
The company has already promised to invest $10.4 billion into halving its emissions by 2030, with the funds largely going towards renewables in Australia.
However, Mr Stausholm says the prioritisation simply isn’t evident throughout the country.
“We are just not developing renewable energy fast enough. That is where we need to put our focus,” he said.
“The way we live, we cannot just reduce our usage of energy as Western societies, so we need energy – and if renewable energy goes slow, then you cannot phase out any fossil fuel.”
Adani Australia chief executive officer Lucas Dow says a swift transition to lower-carbon energy could result in increased energy costs, which has occurred in the past.