Australia Rail Project Threatened; Stocks Fall

Chandrasekhar Atreya
28 Sep, 2010
New York City

Shares in Sydney fell moderately after a 7-day rally. ASX fines MF Global for two separate breaches. Waratah rail project is derailed on the prospect of banks withdrawing financing. Striking workers at Xstrata

[R]6:00 PM Sydney, Australia – Shares in Sydney fell moderately after a 7-day rally. ASX fines MF Global for two separate breaches. Waratah rail project is derailed on the prospect of banks withdrawing financing. Striking workers at Xstrata’s Tahmoor coking coal mine agree to return to work after a new wage deal.[/R]

Stocks in Australia declined after rallying for seven days in a row on weak international market and strong Australian dollar. Telstra rebounded from its low of the day and speculation mounted that the ASX may be close to a deal with a foreign exchange.

The ASX 200 Index in Sydney lost 0.12% or 5.60 to close at 4,669.80 and the Australian dollar closed at 95.80 U.S. cents.

The Australian market regulator said it expects to publish a new timeframe for the entry of additional stock exchange operators after speaking to the government.

The Australian Securities Exchange said Monday it fined broker MF Global Australia A$115,000 plus GST in two separate disciplinary matters heard by its tribunal.

The New South Wales government indicated Monday it is unwilling to cover a possible multi-million dollar shortfall in funding for the Waratah train project. Reliance Rail, the consortium building the trains, revealed that it is in discussions over the funding crisis prompted by the threatened withdrawal of four banks, the Sydney Morning Herald reported Monday.

The Reliance Rail consortium is contracted to build 78 new Waratah trains by 2013 under a public-private partnership signed by the NSW government in 2006, the Herald said.

Xstarta Plc, the world’s largest thermal coal exporter, said the majority of the striking workers at its Tahmoor coking coal mine in Australia have accepted a new wage deal and the mine is set to resume full production shortly.

China said it will import less iron ore in 2010 than in 2009 and will not accept price rise if any brought on by new mining taxes in Australia, the Secretary General of the China Iron & Steel Association said Tuesday.

Treasurer Wayne Swan rejected the predictions made by an independent forecaster that Australia’s budget will return to deficit after a surplus in 2012-13. He said Access Economics who made the prediction are professional pessimists about future growth in this region and in particular about China, in a talk on ABC Radio on Tuesday.

Access Economics is predicting a deficit of nearly A$2 billion in 2013-14 because it does not believe the strength of commodity prices that are supporting the budget return to surplus is sustainable.

Dart Energy agreed to acquire smaller rival and partner Apollo Gas in all stock deal that valued the company at A$140 million.

Papua New Guinea villagers went on a rampage attacking an ExxonMobil gas site. The country’s national newspaper reported that high powered weapons were used in the surprise attack that saw a caterpillar 740 dump truck and service trucks burned and other equipment destroyed.

The attack on the LNG contractors Clough Niugini and Queensland company Curtain Brothers occurred last Friday night near Kaiam Ferry in Kikori, Gulf Province on PNG’s southeast coast. The cause of the unrest is not yet clear.

Nufarm reported a net loss of A$23.9 million after lower demand and prices for its weed killers hit the earnings.

Resource News

Queensland Mining Corp said it began diamond drilling on its Jessievale IOCG project.

Crescent Gold updated its reserve estimate for the Laverton gold project in Western Australia.

Ishine International Resources recently completed an aircore drilling program at its Falcon Bridge project in Western Australia, with encouraging results.

Stellar Resources confirmed Tuesday the presence of a “high-grade zone” near the surface of Queen Hill mineralization, Heemskirk tin project in Tasmania.

Territory Uranium today confirmed that RC drilling started at the Quantum uranium prospect in the Pine Creek region of the Northern Territory.

Eleckra Mines reported excellent gold recoveries in gravity separation at its Yamarna gold project.

Gainers & Losers

Ausenco led the gainers in ASX with a rally of 4.64% to A$2.93 followed by Ten Network Holdings Ltd 4.15% to A$1.38, Monadelphous Group Ltd 3.6% to A$16.42, Virgin Blue Holdings Ltd 3.49% to A$0.445 and Pacific Brands Ltd 3.12% to A$1.155.

Kingsgate Consolidated Ltd led decliners in the index with a drop of 4.75% to A$11.43 followed by Nufarm Ltd 3.9% to A$3.94, Perseus Mining Ltd 3.9% to A$2.96, Avoca Resources Ltd 3.37% to A$3.15 and Aquila Resources Ltd 3.35% to A$8.66.