Australian Indexes Jump 1%, BHP Announced $13 Billion Expansion

Marcus Jacob
25 Mar, 2011
New York City

Stocks in Australia jumped 1% for the second day in a row as miners and resource companies led the gainers. BHP Billiton detailed $13 billion investment plan that will expand capacity of iron ore and energy coal operations. QR Nation plans to spend $185 million to expand its Goonyella network.

[R]5:00 PM Sydney – Stocks in Australia jumped nearly 1% for the second day in a row as miners and resource companies led the gainers. BHP Billiton detailed $13 billion investment plan that will expand capacity of iron ore and energy coal operations. QR Nation plans to spend $185 million to expand its Goonyella network.[/R]

Stocks in Sydney trading closed higher for the third day in a row as investor sentiment shifted and resource and energy prices gain in international markets.

The ASX 200 index increased 43 or 0.9% to 4,742.60 and the All Ordinaries index gained 46.10 or 0.96% to 4,840.30.

The Australian dollar extended the gain to $1.0233 and crude oil declined 17 cents to US$104.99.

BHP Billiton began detailing its US$80 billion investment program for the next five years. The total of US$13 billion will see the expansion of iron ore and coal operations and also expand capacity at its Hay Point terminal.

The mining giant plans to spend US$6.6 billion to increase its coal operations in the Pilbara region and US$5 billion to increase its coal operations at the Bowen Basin in central Queensland.

Of the US$5 billion spending the company’s share is US$2.5 billion across three metallurgical projects and the expansion of Hay Point Terminal.

The company also proceeded with the development of its metallurgical coal operation in Hunter Valley, NSW and increase the output to 24 million tons per annum from 4 mtpa.

Stock Movers

BHP Billiton added 5 cents to $44.76 and the mining company said it will spend US$10 billion to expand its iron ore production and coal output in Western Australia.

Rio Tinto gained 42 cents to $82.02 and Santos Ltd added 19 cents to $15.50. Fortescue Metals Group inched up 16 cents to $6.28.

Fortescue said iron ore production in the current quarter may be lower than previously estimated on a heavy rainfall in Pilbara region. The production is now expected to be near the bottom of the previously announced range between 8.5 million tons and 9 million tons.

The company mined 10.4 million tons in the quarter to March and shipped 9.8 million tons of ore.

Woodside Petroleum Ltd increased $1.16 to $46.72 and Newcrest Mining Ltd increased 71 cents to $38.76.

Brambles Ltd increased 3 cents to $7.06 after received the US approval to acquire 923 million euros for IFCO Systems NV.

Banks extended two days gains and closed higher in the week. Westpac increased 31 cents to $23.73 and National Australia Bank gained 22 cents to $25.02 and Commonwealth Bank added 14 cents to $51.86.

QR National Ltd declined 1 cent to $3.23 after it approved the $185 million expansion of the Goonyella coal rail network as a part of the Hay Point Coal Terminal in Queensland.

The coal terminal owned by BHP Billiton and Mitsubishi announced $2.5 billion expansion and it will increase its processing capacity to 55 million tons from the current 44 million tons.

Goonyella is the largest single coal network in Australia.

Premier Investments Ltd appointed former David Jones chief Mark McInnes to run Premier Retail.