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PRESS DIGEST-Australian Business News - Feb 2
February 1, 2011 / 8:40 PM / 7 years ago

PRESS DIGEST-Australian Business News - Feb 2

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


--Queensland coalminers were yesterday preparing for the impact of tropical cyclone Yasi, with companies closing down parts of their operations, including Rio Tinto’s Hail Creek Mine and Xstrata’s Collinsville mine.  Rail group QR National has closed its Newlands and Goonyella rail networks, while ports along the north coast of the state have also been closed.  Page 47.

--Supermarket group Coles this week reported quarterly sales growth above that of rival Woolworths for the sixth consecutive period.  However, analysts yesterday warned that the growth gap between the two retailers may have peaked, with Coles expected to find further sales growth harder to achieve.  Richard Goyder, managing director of Coles-owner Wesfarmers, said “there is still a fair way to go in Coles.”  Page 47.

--The Takeovers Panel yesterday ruled that there was insufficient evidence to support claims by iron ore company Brockman Resources that a takeover bid from Hong Kong’s Wah Nam International had breached takeover rules.  Brockman had claimed that Wah Nam used associated parties to increase its stake in Brockman.  In November, Brockman rejected Wah Nam’s A$1.9 billion all-scrip takeover offer due to concerns about the underlying value of Wah Nam shares and the group’s inexperience in resources.  Page 48.

--Maryborough Sugar Factory was yesterday preparing four of its Queensland sugar mills for the impact of tropical cyclone Yasi, which is expected to cross the coast early tomorrow morning.  Chief executive Mike Barry said the company had also evacuated around 300 staff from the area.  The cyclone is forecast to hit regions in the north of the state responsible for around a third of Australia’s sugar production.  Page 48.


--Indian group GVK Power & Infrastructure was yesterday reported to have bid almost A$2 billion for a controlling stake in the Kevin’s Corner coal project being auctioned by Gina Rinehart’s Hancock Coal.  Ms Rinehart is auctioning the Queensland asset as she attempts to raise the A$7.5 billion required to develop the nearby Alpha coal project, which is expected to produce 30 million tonnes of coal a year.  Page 35.

--Clive Palmer’s Resourcehouse company could list on Hong Kong’s stock exchange as early as this month.  The A$3 billion float had been planned for early last year, but was postponed due to concerns that media coverage of the proposal had broken local rules regarding promotion of initial public offerings.  The company has released a report on its plans to produce thermal coal in Queensland and magnetite iron ore in Western Australia by 2014.  Page 35.

--Oil and gas group Santos has again extended a payment deadline on the A$100 million sale of its Evans Shoal gasfield in the Timor Sea.  Magellan Petroleum is understood to now have until the end of May to provide payment.  Magellan is 20 percent owned by Russian businessman Nikolay Bogachev, whose Young Energy Prize company is to receive an increased stake in Magellan in return for providing the funds required for payment.  Page 36.

--Perth businessman Ian Trahar yesterday launched a takeover bid for window blind manufacturer Kresta Holdings .  Mr Trahar, who owns around 20 percent of the company, has resigned as chairman, but remains a director.  Hunter Hall Investment Management, which also controls around 20 percent of Kresta, is seeking to remove Mr Trahar from the board at a shareholder meeting on February 14, and yesterday said “we believe this low-ball bid is just the latest example of the conduct of Mr Trahar since he joined the Kresta board.”  Page 37.


--The insurance industry has warned that Australia’s risk rating among global reinsurance firms is set to rise if tropical cyclone Yasi causes widespread damage in Queensland.  The industry is still determining the cost of the state’s floods last month, with the damages bill now above A$1.5 billion.  The industry has had to make a number of significant payouts on natural disasters in recent years, with the latest events likely to place further upward pressure on premiums.  Page B1.

--Westpac Banking Corporation has fallen three spots to number 18 on the latest Global 100 List of the world’s most sustainable companies.  However, the bank remains Australia’s top-ranked company on the list.  Other Australian companies to feature included Origin Energy at number 19, Insurance Australia Group at 42, Stockland at 55, Sims Metal at 63 and GPT at 95.  Page B2.

--Poor production from Energy Resources of Australia’s (ERA) Ranger uranium mine has prompted a surge in the spot price of the radioactive material, according to Ux Consulting.  Ux says the spot price of uranium climbed US$10.50 a pound last month to US$73 a pound.  The increase has helped halt ERA’s share price slide, which has seen the company lose A$2.5 billion in market value over the past 13 months.  Page B3.

--Airline Virgin Blue has agreed to a “mutual capacity commitment agreement” with United States (US) carrier Delta Air Lines , in a bid to dispel US concerns about the two airlines’ proposed alliance.  US authorities rejected the planned alliance in September, stating that the airlines had failed to demonstrate that the alliance would benefit travellers.  The Australian competition regulator approved the proposed deal in December 2009.  Page B3.


--Foster’s Group yesterday announced it would no longer contribute financially to Wine Australia in Britain, saying the marketing body had failed to “promote and represent our total portfolio of Australian brands.”  Wine Australia’s “A+” strategy in Britain focuses on “genuine Australian brands” in a bid to raise the prices consumers are prepared to pay for Australian wines.  However, Foster’s generates significant revenue through the sale of cheaper wines that are not included in the marketing initiative.  Page B3.

--The share price of forestry products group Gunns yesterday plunged 19 percent in an hour and a half before partially recovering.  However, the fall occurred on low volumes, and a spokesperson for the company said it had not received a price query from the Australian Securities Exchange.  Gunns is continuing to seek financing for its key A$2.2 billion pulp mill project in Tasmania, with state’s new Premier, Lara Giddings, confirming continued government support for the project.  Page B3.

--Shares in Kidman Resources yesterday rose 92 percent to A37.5 cents a share after the company released early but positive exploration results from its Blind Calf copper prospect in New South Wales.  The company, which listed on the exchange just two weeks ago, stressed that the results were preliminary, with a more extensive exploratory drilling program to start next month.  Page B7.

--Coal gasification proponent Cougar Energy yesterday said it is considering taking legal action against the Queensland government over its decision to shut down the company’s pilot project at Kingaroy.  The Government shut down the project last July after detecting chemicals in a nearby water bore, and last week ordered that the project be decommissioned.  Cougar claimed an independent report used to justify the move contained “a number of factual inaccuracies.”  Page B7.

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