Australian Mining Jobs Decline, Fortescue Debt Worries Weigh on Markets

Marcus Jacob
13 Sep, 2012
New York City

Australian stocks declined in the final hour of trading after the third largest miner Fortescue Metals sought help of banks in restructuring its debts. Mining sector employment declined for the first time in three months to August by 4,600.

[R]8:30 PM Sydney – Australian stocks declined in the final hour of trading after the third largest miner Fortescue Metals sought help of banks in restructuring its debts. Mining sector employment declined for the first time in three months to August by 4,600.[/R]

Australian stocks were under pressure in the final hour of trading after the third largest mining company Fortescue Metals may be forced to restructure its loans.

In addition, the latest government report indicated that employment in the mining sector fell for the first time in three years.

Net jobs in the mining sector declined 4,600 in three months to August after increasing by 25,500 in the three months to May. However, the total employment in the industry was still 44,600 higher than the year ago period.

Mining sector employs 270,600 or 2% of total 11.5 million employed in Australia and has been struggling in the last few months with the strong dollar, rising costs and China’s desire to slowdown its economic growth.

The sector in the last financial crisis during 2009 and 2009 lost net 27,400 jobs over six months.

The ASX 200 index slumped 21.90 to 4,339.40 and the broader All Ordinaries decreased 23.35 to 4,359.77.

The Australian dollar eased to US$1.044 after rallying for three days in a row.

Stock Movers

Fortescue Metals was in focus after the company entered in discussion with its lender to restructure its loans as the iron ore price trend below $100 a ton.

BHP Billiton Limited slipped 7 cents to $32.78 and, Rio Tinto Limited slid 4 cents to $55.05 and Fortescue Metals Group plunged 48 cents or 13.8% to $2.99.

Lynas Corporation Limited climbed 3.5 cents or 4.1% to 88 cents and Iluka Resources advanced 22 cents to $9.91.

Newcrest Mining slid 4 cents to $26.43; Kingsgate fell 2 cents to $4.85 and Whitehaven Coal decreased 4 cents to $2.96.

Transfield Services declined 10 cent or 5.5% to $1.71 billion; engineering contractors WorleyParsons gained 5 cents to $26.25 and Monadelphous Group slumped 26 cents to $19.63.

Oil Search Limited decreased 6 cents to $7.63 and Santos Limited up 1 cent to $11.78 and Woodside Petroleum added 1 cent to $34.51. Sundance Energy lowered 1 cent to 75 cents.

Seven West Media closed unchanged at $1.33, Ten Network slid 1 cent to 36 cents and Fairfax Media added 0.5 cents to 47 cents and the controversial News Corp. declined 35 cents to $23.19.

Myer decreased 2 cents to $1.83 after the department store retailer full-year to June earnings declined 14.3% to $139.3 million and sales dropped 1.3% to $3.1 billion.

Harvey Norman Holdings slid 2 cents to $2, Woolworths lowered 4 cents to $28.90 and Kathmandu added 1 cent to $1.40.

Commonwealth Bank of Australia down 4 cents to $55.02 and Bank of Queensland increased 7 cents to $7.70. ANZ slipped 6 cents to $24.14. National Australia Bank slumped 12 cents to $25.28 and Westpac Banking Corporation slid 16 cents at $23.80.

Macquarie Group declined 33 cents to $28.25 and Perpetual Limited slipped 28 cent to $26.53.

David Jones Limited decreased 5 cents to $2.35 and Wesfarmers dropped 44 cents to $34. Billabong International Limited closed unchanged at $1.42. Breville Group closed unchanged at $5.43. Harvey Norman slid 2 cents to $2.

Toll Holdings added 1 cent to $4.62, Leighton slumped 12 cents to $15.02, and property developer Mirvac Group down 1 cent at $1.42.

Qantas slid 1 cent to $1.24, Flight Centre gained 8 cents to $24.73 and Virgin Australia lowered 0.5 cents to 42.5 cents.

QR National decreased 4 cents to $3.40 and Telstra added 2 cents to $3.85.