Australian Markets Rebound, Miners Report Production Growth

Marcus Jacob
16 Jan, 2014
New York City

Australian market indexes rebounded on better-than-expected production reports from mining and energy companies. The Aussie dollar edged lower. Rio Tinto said annual production in Pilbara region increased 5%. Woodside Petroleum sales declined less than expected.

[R]4:30 PM Sydney – Australian market indexes rebounded on better-than-expected production reports from mining and energy companies. The Aussie dollar edged lower. Rio Tinto said annual production in Pilbara region increased 5%. Woodside Petroleum sales declined less than expected.[/R]

Australian stocks extended gains and recovered some of the losses early in the week on strong production reports from mining and energy companies.

The Australian Bureau of Statistics reported unemployment rate remained at 5.8% in December.

The statistics agency added for the same period economy lost 22,600 jobs and 11.63 million people were employed.

Australian dollar slipped to 88.15 U.S. cents and in stock market turnover increased to 723 million shares worth $4.4 billion.

The ASX 200 index jumped 63.70 or 1.2% to close at 5,309.10 and the broader All Ordinaries index climbed 63.90 to 5,319.40.

Stocks in Review

Rio Tinto jumped $1.34 to $65.58 and the mining company said Pilbara iron ore set new quarterly production record of 66.5 million tons and total production for the year jumped 5% to 209 million tones. Production at Kennecott Utah copper surged 29% and mined copper climbed 15%.

Concentrate production at Oyu Tolgoi jumped to 33,000 tons of copper and 73,000 ounces of gold.

In the fourth quarter, the company divested $3.5 billion of non-core assets and cut capital expenditure by $1 billion.

The miner achieved record iron ore and coal production in 2013.

BHP climbed 89 cents to $36.82.

Woodside Petroleum Limited increased $1 to $38.63 after the oil and gas producer said revenue for the year dropped to $5.78 billion from $6.23 billion and for the fourth-quarter sales declined 7% to $1.65 billion from $1.77 billion a year earlier.

Production in the fourth-quarter declined 4.5% to 23.2 million barrels of oil equivalent compared to 24.3 MMboe a year ago period. The oil and gas producer settled $400 million in write-downs.

Westpac rose 12 cents to $31.83.

Bega Cheese Ltd rose 0.2% to $4.62 after the dairy products maker said it will sell its 18.8% stake in Warrnambool Cheese and Butter Factory Co. Holdings Ltd to Saputo Inc in an extended takeover battle.

Suputo now holds 45% stake in Warrnambool.

Fortescue Metals Group Limited jumped 3.8% to $5.53 after the iron ore producer signed contract for long-term gas pipeline deal to reduce the costs at mining operations in Pilbara region.

Iluka Resources Limited soared 7.6% to $8.89 after the zircon producer said mineral sands revenue in the year ending in December dropped to $763 million from $1.07 billion a year ago.

The miner said production of zircon in the year tumbled to 42% but the output is in-line with its guidance.