MFS Freezes Fund, Lihir Gold production Up

123jump.com Staff
30 Jan, 2008
New York City

ASX 200 index declined 1.7% or 97.8 to close at 5,618.70. BHP Billiton today signed an agreement with China''s leading steelmaker Baosteel to supply an additional 94 million tons of iron ore at a price that is to be determined. MFS, fund manager froze one of its funds for six months to prevent run on the fund. Woolworth sales rose 8.3%, less than projected. Lihir Gold production in 2007 rose 7.7% to 701,000 ounces.

[R]3:00AM New York, 7:00PM Sydney- ASX 200 index fell 1.7% as banking stocks fall.[/R]

ASX 200 index declined 1.7% or 97.8 to close at 5,618.70.

Mining giant, BHP Billiton today signed an agreement with China''s leading steelmaker Baosteel to supply an additional 94 million tons of iron ore.

BHP will supply Baosteel with 10 million tons of iron ore each year for 10 years at a price to be agreed each year with the first shipment under the new contract expected in April.

Baosteel vice president Dai Zhihao said the contract would enhance the long-term cooperation between Baosteel and BHP Billiton. BHP Billiton has been a long time partner to Baosteel through the supply of carbon steel materials products. It also supplies nickel for Baosteel''s expanding stainless steel production.

BHP Billiton stock was up 1.1%.

Australia''s biggest retailer, Woolworths Ltd reported 8.3% increase in sales to $12.3 billion (US$11 billion) in the three months ended December 30. The results were however short of analyst estimates of a median estimate for a 10% increase. Rising fuel prices and interest rates curbed growth at Woolworth''s supermarket and discount stores.

Woolworth''s shares fell 4.2%. The stock fell 13% this year compared with an 11% decline in the benchmark index. Wesfarmers fell 5.1%, David Jones Ltd fell 7.2% and Harvey Norman Holdings Ltd declined 4.8%.

PT Aneka Tambang and its Chinese partner today upstaged its Indonesian rival in its bid to gain control of Herald Resources Ltd''s lead and zinc project by offering $505 million (US$449 million) in cash for the project.

Herald today disclosed that the Indonesia based PT Aneka Tambang and Chinese partner Shenzhen Zhongjin Lingnan Company offered for its Indonesian project was equivalent to $2.50 a share, 25 cents more than Indonesian company, PT Bumi Resources'' bid of $2.25.

Herald waited for two years for the approval for the $192 million Dairi mine. The joint bid by Antam, which is owned by the Indonesia''s government, and Zhongjin Lingnan might ensure the project goes ahead to meet rising metals demand from China.

Herald''s share rose 3.2%. Antam is Indonesia''s second-largest nickel mining company by market value, and Zhongjin Lingnan is China''s fourth-biggest zinc producer.

Embattled finance group, MFS today froze $770 million worth of investments belonging to more than 10,000 of its investors as it moved to save itself from collapse.

The company froze $770 million held in its Premium Income Fund for six months to halt a run on redemptions as investors rushed to recover their money fearing that the company might fail to source $150 million of debt due within weeks.

While MFS has maintained that the move does not affect its other funds, investors with $5.4 billion of investment in various funds have been nervous with the ongoing volatility in the stock. MFS uses the money raised from investors to lend to property developers in first mortgage loans.

MFS last week suspended its shares from trading after shedding more than $1.5 billion in value. MFS shares, which were trading at about $5 last month, slumped to 99 cents after MFS two weeks ago called for a $550 million cash injection.

Lihir Gold''s annual gold production rose to a record after jumping 7.7% to 701,091 ounces. The company estimates additional increase in production in the current year.

The performance was in line with expectations, and included strong production of 168,370 ounces in the December quarter. The company, which operates the Lihir Island mine in Papua New Guinea, expects output to rise between 740,000 and 820,000 ounces in the current year.

Managing Director Arthur Hood said Lihir Island was expected to produce a range of 700,000 to 770,000 ounces while Ballarat was expected to produce 40,000 to 50,000 ounces. Lihir said the final outcome at the PNG mine depended on ore grade and normal operating variability.

The company achieved annual sales of 708,428 ounces of gold last year at an average price of US$666 an ounce. The cash gold price received for the December quarter increased to US$794 an ounce, from US$677 in the September quarter. Total cash costs were US$301 an ounce for the year, up from US$297 in the previous year.

The dollar closed marginally weaker today, encountering resistance at US$0.8900 for the second day running, as traders held their positions ahead of the US interest rate decision.

At the close the dollar was trading at US$0.8877/83, down marginally from yesterday''s close of US$0.8880/84. Dollar traded between a low of US$0.8872 and a high of US$0.8894 in the session.

Of the ASX 200 index shares, Aquarius Platinum led the gainers with a rise of 6.3% followed by increases in Alesco Corp Ltd of 4.3%, in Alumina Limited of 4%, in Newcrest Mining of 3.7%, and in Onesteel Limited of 3.5%.

Of the ASX 200 index stocks, Emeco Holdings L led the decliners with a fall of 24.5% followed by losses in Allco Finance Group of 10.5%, in Roc oil Company of 8.9%, in Riversdale Minin of 8.5% and in Tower Australia of 7.4%.