Rio Tinto Suspends Talk With China

Darlington Musarurwa
04 Sep, 2009
New York City

Coal companies surged as merger activities in the sector heats up. Only a day ago Coal India, the state controlled coal miners said that it is looking to acquire coal companies in Australia. Rio Tinto has suspended its price negotiation talks with China.

[R]3:00AM New York, 7:00PM Sydney – Coal companies surged as merger activities in the sector heats up. Only a day ago Coal India, the state controlled coal miners said that it is looking to acquire coal companies in Australia. Rio Tinto has suspended its price negotiation talks with China.[/R]

In Sydney trading ASX 200 index rose 0.2% or 7.9 to 4,437.50.

Of the ASX 200 index stocks, 99 rose, 83 dropped, and 18 were unchanged. Lynas Corp. led advancers in the index shares with a rise of 14.1% followed by Emeco Holdings increasing 8.6%.

Rio Suspends Discussions with China

Rio Tinto chief executive officer Sam Walsh said today the company has suspended iron ore price talks with China after the detention of company executive Stern Hu by Beijing.

According to Walsh, Rio is shipping iron ore to China on a “provisional” price based on the benchmark settlement with Japanese, Taiwanese and South Korean customers. The prices are 33% lower than a year ago and Chinese are seeking 35% discount.

China has detailed the head of negotiating team and three sales staff of Rio Tinto and charged them for bribery and commercial secret theft.

Separately, Walsh noted the proposed joint venture with BHP Billiton will not reduce competition in the market. The two companies are expected to launch their joint venture by 2010.

New Zealand Car Sales Fall 1.3% in August

New Zealand Transport Agency reported today the country’s new car registrations declined 1.3% to 4,417 in August from the previous month, dropping for the first time in four months.

The transport agency also noted that total registrations fell 3.2% to 10,291, while registrations of imported used cars decreased 4.6% to 5,874.

Aussie Slips 0.1%

The Australian dollar decreased 0.1% to 83.94 against the dollar ahead of the U.S. jobs report.

Gainers & Losers

Commodities traded mixed. Copper prices rose on expectations demand will increase as the global economy recovers. Macarthur Coal Limited increased 7.4% to A$8.63.

Platinum stocks gained. Platinum Australia soared 5.5% and Aquarius Platinum climbed 5%.

Gold prices increased 1.9% to $997.70 an ounce, while crude oil prices slipped 0.1% to $68 per barrel. Iluka Resources slumped 3.8%, AGL Energy declined 3.2% and Murchison Metals fell 3.6%.

Extract Resources Limited increased 0.2% to A$9.80.

Macquarie Group Limited fell 1.0% to A$48.70.

Rey Resources Limited surged 20.5% to A$0.235 after the Crosby Capital offered A$43.4 million or 19.5 Australian cents a share exceeding the offer Gujarat NRE Minerals Ltd of 9.5 cents a share or 20% of its issued capital.

ASX Movers

Babcock & Brown Infrastructure Group led the decliners in the S&P ASX 200 index with a loss of 21.8% followed by losses in Lend Lease Corporation Limited of 4.9%, in Iluka Resources Limited of 4.5%, in PaperlinX Limited of 4.3% and in Murchison Metals Limited of 3.6%.

Lynas Corporation Limited led gainers in the S&P ASX 200 index with a rise of 12.4% followed by gains in Emeco Holdings Limited 10.0%, in Dominion Mining Limited of 7.9% and in Macarthur Coal Limited of 7.4%.