Cost pressures on miners are very real

IN Australia, complaining about how much things cost is a sport. Recently, no one has done better than the country's resources sector.

First, the Minerals Council of Australia -- a lobby group for BHP Billiton, Rio Tinto and Xstrata, among others -- took out full-page ads in national newspapers claiming the taxes and royalties paid by the industry have increased sixfold over the past decade.

Then Rio chief executive Tom Albanese painted a worrying picture of high labour costs and steep freight rates hitting the coal sector. Finally, liquefied natural gas company BG Group announced a $5 billion cost blowout -- 36 per cent over budget -- on its Curtis project in Queensland, and blamed it on the strong Australian dollar and rising material and labour costs.

Was this just lobbying ahead of Tuesday's federal budget? Or an attempt to manage sky-high expectations for the resources boom? For investors, the answer doesn't matter.

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The Australian