PRESS DIGEST-Australian Business News - Dec 29

Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.

THE AUSTRALIAN (www.theaustralian.news.com.au)

Western Australia's Treasury yesterday published its mid-year budget review, revealing that the department expected royalty earnings to fall by nearly A$1 billion over the next four years as a result of the debt crisis in Europe.

"International financial markets have fallen on the back of ongoing concerns with the European sovereign debt crisis and a slower than expected recovery in the [United States]," the review said. Page 15.

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Entrepreneur Geoffrey Edelsten yesterday revealed that he has received an offer to invest in an airline, which could potentially see the deregistered general practitioner become a white knight for the struggling Air Australia.

"Although I am a pilot, running a commercial airline would require a great deal of expertise to be successful," Mr Edelsten said. A spokesperson for Air Australia said the airline's owners were "open to the possibility of equity investment with the right partner". Page 15.

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Energy Metals has signed its first agreement to trade uranium in Australia, which will see the junior uranium producer export 68 tonnes of third-party uranium concentrate to China at A$53 a pound.

The company, however, declined to reveal the seller of the shipment. Managing director Weidong Xiang yesterday said the trial shipment would give the company the ability to review the profitability of forming a uranium exporting company in Australia. Page 16.

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IronClad Mining's bid to develop an iron ore project near South Australia's Kimba has won the support of the state government.

Ian Finch, chairman of the miner, said the decision would help make the company a worldwide organisation.

"The Program for Environmental Protection and Rehabilitation has been an exhaustive process as it details the construction, commissioning, operation and eventual rehabilitation of the mine," Mr Finch said. Production from the site is expected to reach one million tonnes in the first 12 months. Page 16.

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THE SYDNEY MORNING HERALD (www.smh.com.au)

Fortis Mining yesterday informed the Australian Securities Exchange that its former chief executive and founder Frank Cannavo had "agreed to resign" from the company "with immediate effect".

The resignation strengthens chairman Cheung Kwan's control of the potash explorer, of which he owns 19.4 percent, and comes after the corporate regulator prevented the company from raising A$35 million to fund potash ventures in Kazakhstan. Page B18.

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BHP Billiton yesterday rejected environmental concerns over the exporting of toxic by-products from its Olympic Dam mine, after a derailment caused by flash flooding in the Northern Territory earlier this week resulted in toxic copper concentrate spilling into the Edith River.

While not involved in the incident, the global miner has confirmed that it will use rail wagons with airtight and waterproof seals on the same rail link. Page B18.

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Queensland-registered gas explorer Dart Energy is set to acquire approximately A$42 million worth of gas licences in Britain from coal bed methane explorers Greenpark Energy.

The bid marks Dart's ambition to expand into the British market, having secured a supply agreement worth approximately A$689 million for 45 billion cubic feet of gas with infrastructure group SSE Utility Solutions earlier this year. Page 16.

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Shares in Myer yesterday slipped to their lowest levels since the luxury retailer listed on the Australian Securities Exchange two years ago.

Investors pushed the stock 1.8 percent down to close at A$1.955 following disappointing post-Christmas sales and a series of earning downgrades from retailers such as Kathmandu, JB Hi-Fi and Billabong from the sector in the lead up to the holiday period. Page B19.

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THE AGE (www.theage.com.au)

The S&P/ASX 200 index slipped 51.6 points yesterday to close at 4088.8 points, with the retailing, financial services and resources sector influencing the fall.

"This is a disappointing day but on the other hand it is the hiatus period and turnover is not that great," Michael Heffernan from broker Austock Securities said. "There's a general lack of market-driving announcements or news at the moment," he added. Page B15.

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Shares in mining services provider AJ Lucas plummeted yesterday after investors dumped the company in its first day of trading after a seven month suspension.

AJ Lucas halted trading earlier this year as it attempted to raise funds following the floods in Queensland, rising capital requirements and a drop in earnings. The stock closed A18.5 cents lower to finish at A$1.165, recovering slightly from a low of A$1.115 earlier in the day. Page B18.

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Rumours are mounting that the real estate investment trust sector will play host to several major takeover deals in 2012, according to observers, due to an increase in yields and an expectation that interest rates will be lowered.

Some of the likely transactions are tipped to include the sale of DEXUS Property Group's industrial portfolio in the United States, as well as the sale or separation of FKP Property Group. Page B19.

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Local retailers struggled on the stockmarket yesterday, after a series of earning downgrades and poor holiday sales sapped investors' enthusiasm for the sector.

Harvey Norman shares closed 2.2 percent lower at A$1.81, JB Hi-Fi stock fell 2.5 percent to A$11.35 and luxury retailer David Jones closed at A$2.38, its lowest point since March 2009. Outdoor adventure wear franchise Kathmandu bucked the trend, however, to close A1 cent higher at A$1.33. Page B20.