3:00AM New York, 7:00PM Sydney – BHP increases estimate of its mineral reserves in Western Australia. Chinese and Japanese steel companies agree to nearly 100% price increase with Rio Tinto.
Market Sentiments
ASX 200 index gained 0.1% or 4.6 to close at 5,283.70. The preliminary market turnover was 1.90 billion shares worth $6.41 billion, with 491 stocks rising, 813 falling and 389 unchanged. The most traded stock was Empire Oil & Gas, with 61.32 million shares worth $1.36 million.
Market Driver
BHP Billiton has approved stage one development of the Maruwai metallurgical coal basin in Indonesia for a capital investment of approximately $100 million.
In a statement today, the mining giant said the initial development project is the Haju open cut mine, along with an associated river port, with construction expected to start immediately, with first production expected in mid-2009.
The Haju mine that is 100% owned by BHP, is a small coal deposit within the Maruwai basin that will initially produce approximately 1 million tons per annum of metallurgical coal, with expansion potential to approximately 2 mtpa.
BHP also announced increases in mineral resources and ore reserves at its different mines with Western Australia iron ore recording a 46% increase in the mineral resource and a 23% increase in the ore reserves.
Mineral resource at Samarco Mineracao was up 11% and ore reserve rose to 30%. Mineral resource at Samancor Manganese was up 82%.
BHP share closed up 2.9% and Rio Tinto closed higher 3% after concluding an agreement with Baosteel for price increase up to 96.50% for iron ore shipment. Rio Tinto hopes to increase iron ore production between 320 million and 420 million tons per annum from its current 220 million tons per annum.
Gainers and losers
Of the ASX 200 index stocks, Papaerlinx Ltd led the gainers with a rise of 10.6% followed by increases in Fortescue Metals of 9.1%, in Brambles Ltd of 9%, in Paladin Energy L of 8.8% and in Sundance Resource of 7.5%.
Of the ASX 200 index stocks, Allco Finance Group led the decliners with a fall of 10.3% followed by losses in Transurban Group of 9%, in Valad Property of 8.9%, in Connecteast Group of 8.4% and in Babcock & Brown of 8.3%.
BG engages Origin shareholders
British gas company BG Group has taken its $13.8 billion bid for Australia''s Origin Energy Ltd directly to shareholders after Origin management rejected its offer a month ago. The Group''s bid values Origin Energy Limited at A$15.50 cash per share and the offer price represents a 48% premium to Origin''s closing price of $10.47 on 29 April 2008.
BG Group Chief Executive Frank Chapman said: ""Origin has good retail, power generation and exploration and production businesses. BG Group has performed a thorough and balanced assessment of Origin''s prospects and is offering an all-cash 72% premium to the 90-day VWAP to the date immediately prior to the announcement of our initial proposal.""
The board rejected BG''s bid of $15.50 on May 30, citing the increased value of its reserves after rival Santos struck a deal with Malaysia based Petronas that valued the CSG gas reserve at as much as 100% higher the valuation offered by BG.
BG is seeking to gain access to Origin''s gas resources in eastern Australia, which may feed a proposed liquefied natural gas project supplying utilities in northern Asia.
Origin share was up 5.8%.
Perilya''s board rejects merger with CBH |
