Sydney Index Drops; Rio Tinto, Riversdale Mining in Talks

Chandrasekhar Atreya
06 Dec, 2010
New York City

Sydney stocks traded sideways as the miners led the gainers and banks declined. Job ads in Australia rose for the seventh month in a row in November. Rio Tinto may offer $3.5 billion to Riversdale as two companies explore possibilities.

[R]6:00 PM Sydney, Australia – Sydney stocks traded sideways as the miners led the gainers and banks declined. Job ads in Australia rose for the seventh month in a row in November. Rio Tinto may offer $3.5 billion to Riversdale as two companies explore possibilities.[/R]

The benchmark index traded sideways and closed nearly flat with miners leading the gainers and banks leading the decliners.

The ASX 200 Index closed marginally lower 0.12% or 5.60 points to 4,688.60.

The Australian dollar closed higher at 98.96 U.S. cents in Sydney today on weaker than expected U.S. jobs report.

Macquarie Infrastructure and its infrastructure fund Real Assets (Europe) Ltd acquired the German natural gas transmission network Thyssengas GmbH from Europe’s fifth-largest utility RWE AG for an undisclosed sum.

In an e-mailed statement RWE said the sale is subject to approval by the board of the German utility, the European Commission and the relevant antitrust authorities.

Jobs advertised in Australian newspapers and online rose for the seventh month in a row, a survey shows.

The ANZ job advertisements series showed that the major newspapers in Australia and on the Internet carried 2.9% more ads for jobs in November, to a seasonally adjusted average of 184,580 per week.

Inflation in the last quarter of the year is likely to be higher than the target set by the central bank, a survey shows.

The TD Securities Melbourne Institute Monthly Inflation Gauge rose by 0.4% in November after rising 0.1% in September and 0.3% in October due to pick up in price pressures. Headline inflation rose 0.9% for the December quarter for an annual rate of 3.2%.

The global economic uncertainty, carbon pricing, mining tax indecision and the pace of growth in China have all together put the brake on the market values of the country’s top 100 listed mining companies, a report showed.

The Ernst & Young report released today showed that the market value of the top listed 100 miners on the ASX fell to A$495 billion in October from A$497 billion in March of this year.


The $8.4 billion takeover offer made by Singapore Stock Exchange for ASX Ltd is in the interest of Australia, according to a finding of a research firm.

The report of Access Economics commissioned and released today by the Australian Securities Exchange showed that the deal would improve the nation’s chances of becoming a financial services hub in Asia and also lower the cost of capital for Australian companies.

The Australian operations of the ASX-SGX would continue to be regulated by ASIC, with an Australian board and chair with four of the merged group’s board expected to be Australian.

Riversdale Mining, which holds 13 billion tons of coking coal resources in Mozambique, confirmed today morning that it is in talks with Rio Tinto about a possible takeover centered on the indicative offer of $15 per Riversdale shares or $3.5 billion in total.

Riversdale surge as much as 15% in trade today despite the lack of any formal offer from Rio.

Foreign Minister Kevin Rudd said the bilateral ties with China are quite robust, following the Wiki leaks, which revealed that when Rudd was the premier he had warned the U.S to be prepared to use force against China.

“It’s a robust relationship and diplomacy is a robust business,” he told reporters in Canberra today.

Stock Movers

Coal producer Riversdale Mining soared 15.7% to A$16.31 after it confirmed the company talks with Rio Tinto.

Sundance Resources was the second best gainer in the index with a rise of 6.94% to A$0.385.

Gold producer Newcrest Mining added nearly 1% to close at A$41.09 as gold prices closed above $1,400 per ounce.

BHP Billiton lost 0.13% or 6 cents to A$44.53 and Rio Tinto dropped 42 cents to close at A$86.0.

All the four big banks closed lower.

Westpac Banking Corp fell 1.14% or 25 cents to A$21.68 and Commonwealth Bank of Australia lost 0.28% or 14 cents to close at A$49.29. ANZ dropped by 4 cents to close at A$23.27 while National Australia Bank lost 21 cents at A$23.72.

Sigma Pharmaceuticals led the losers in the index dropping 17.35% to A$0.405 with the loss of distribution business from Pfizer.