BHP Billiton, Rio Tinto Cancel Iron Ore Venture, Dollar Eases

Chandrasekhar Atreya
18 Oct, 2010
New York City

Australian shares declined today and the dollar eased from its record high on Friday. BHP Billiton and Rio Tinto formally cancel the Pilbara iron ore venture as it faced regulatory hurdles from Australia, Korea, Japan and EU. Heavy rains in Queensland delays iron ore exports.

[R]6:00 PM Sydney, Australia – Australian shares declined today and the dollar eased from its record high on Friday. BHP Billiton and Rio Tinto formally cancel the Pilbara iron ore venture as it faced regulatory hurdles from Australia, Korea, Japan and EU. Heavy rains in Queensland delays iron ore exports.[/R]

A burst of corporate activity was not enough to lift shares in Australia as banks and financial markets led the market to its biggest drop in the month on U.S. concerns.

The ASX 200 Index lost 0.79% or 37.1 points to close at 4,651.90.

The Australian dollar rose above parity with the U.S. dollar for the first time since floated in December 1983, before easing and ending trading in New York at 98.93 cents.

However, the Australian dollar was lower at noon on today in Sydney trading, backing away from the record high on Friday and closed at 98.51 U.S. cents.

BHP Billiton and Rio Tinto have formally abandoned their $116 billion Pilbara iron ore joint venture after receiving negative feedback from regulators.

“Both parties have recently been advised that the proposal would not be approved in its current form by the European Commission, Australian Competition and Consumer Commission, Japan Fair Trade Commission, Korea Fair Trade Commission or the German Federal Cartel Office,” BHP and Rio said in a joint statement.

Perpetual Ltd said Monday it received a takeover offer from Kohlberg Kravis Robert & Co, valuing the company at as much as $1.75 billion.

KKR offered to acquire Perpetual at a price of $38 to $40 a share, valuing the company at $1.66 billion to $1.75 billion. Perpetual shares closed trading on Friday at $30.97 and surged today 22% to close at $37.80.

Tabcorp Holdings is pursuing a $430 million capital raising as it moves to split its casino operations from its gaming, wagering and keno operations.

Tabcorp said splitting its operations in two recognizes the different opportunities and investment profiles of its businesses. New shares will be offered through a one-for-nine underwritten entitlement offer at $6.25 each, compared to the last traded value of $7.10.

Minbos Resources made a low key debut on the ASX on Monday despite the company’s initial public offering was oversubscribed.

Heavy rains in Queensland may cause sporadic delays to coal exports leading due to congestion at ports in the east coast of Australia, Commodore Research & Consultancy said Monday.

Queensland which produces 95% of Australia’s sugar and is the country’s largest coal exporter, may get more rainfall than average this season because of the La Nina weather pattern, the weather bureau said on October 4.

Resource News

Dynasty Metals of Australia won priority for an additional two tenements in the Pilbara region of Western Australia increasing its tenement holdings to around 4,569 square kilometers.

Mantle Mining Corp made arrangements to raise $600,000 through Cygnet Capital by a placement of 20 million shares at 3 cents each.

Tap Oil suspended production at the Markisa-1 well in Brunei Darussalam after both Mawar-1 and Markisa-1 encountered hydrocarbons.

Gainers & Losers

Perpetual Ltd led gainers in the ASX with a rally of 22.05% to A$37.8 followed by Platinum Australia Ltd 7.89% to A$0.615, Gunns Ltd 6.67% to A$0.64, Isoft Group Ltd 4.76% to A$0.11 and Carnarvon Petroleum Ltd 4.17% to A$0.50.

Linc Energy led decliners in the index with a drop of 9.27% to A$1.86 followed by Perseus Mining Ltd 6% to A$2.82, Avoca Resources Ltd 5.45% to A$3.12, Panaust Ltd 4.94% to A$0.77 and Aquarius Platinum Ltd 4.22% to A$6.13.