The week that was...

Storm weathered

SURVIVING a year of unpredictable weather that resulted in drought-affected crops in Queensland and severe frost damage in southern NSW, Australian wheat farmers harvested a $5.5 billion crop.

The 2001-2 harvest is expected to exceed 23 million tonnes, according to AWB Ltd (formerly the Australian Wheat Board). Farmers in WA have not yet concluded harvesting, with AWB Ltd expecting a crop of 7.5mt after a disastrous start to the growing season in this State.

This year’s harvest was bolstered by record crops in South Australia of 5mt and good seasons for Victoria and NSW. The real difference for this harvest is the price – $247 a tonne for the benchmark Australia Premium White.

An unlikely combination of high price and huge crop will produce record earnings for the industry.

AngloGold’s out

NEWMONT Mining Corp is expected to assume control of Australia’s largest gold miner, Normandy Mining. Barring entry of a third bidder, there are few obstacles standing between Newmont and its three-way merger with Normandy and Canadian royalty house Franco-Nevada.

Friday night witnessed the end to AngloGold’s contention for Normandy, following support from only 7 per cent of the target’s shareholders. The value of Newmont’s scrip-and-cash offer was $2.05 per Normandy share, compared with $1.99 for AngloGold.

AngloGold directors conceded defeat during a phone hook-up after assessing the merits of extending its $4.2 billion offer for another week. While AngloGold may have failed to prevent Newmont forming the largest gold mining company in the world, its last-ditch attempt to amass a 10 per cent-plus blocking stake in Normandy would give it a seat in negotiations.

ANZ/ING alliance

AFTER a 10-month search, ANZ Banking Group has found a partner in Dutch financial services giant ING. The alliance, worth $38 billion and labelled ING Australia Ltd, will fall in line behind Commonwealth Bank/Colonial, AMP and National Australia Bank MLC.

Chief executive officer John McFarlane consulted several groups, including Axa Asia Pacific and Deutsche Australia Asset Manage-ment, before entering into the deal under which ANZ will outlay an expected $1 billion for its 49 per cent share. ING will own the remaining 51 per cent of ING Australia.

The deal will enable ANZ to offer its five million customers a broader range of financial products without the bank needing to operate a full-scale funds management business.

Enron debacle

WHILE the sale of Enron Corp’s once formidable energy trading operations to investment bank UBS AG is a positive step for the company, its dealings with the Bush administration continue to raise eyebrows.

Revelations concerning potential conflicts of interest have attracted investors, lawmakers and the media to scrutinize Enron’s dealings with creditors, banks and the Government.

Senate investigators issued 51 subpoenas for documents from Enron directors, senior managers and from the companies auditing firm, Arthur Anderson LLP. The accounting firm disclosed its employees had destroyed a number of documents related to Enron.

Enron and its CEO, Kenneth Lay, are known to have contributed more than $1 billion to Bush electoral campaigns, with 15 known Bush Administration officials owners of Enron shares. According to White House officials, it had been expected that Enron made repeated requests of the Government to help its financial predicament.

Public costs

THE Federal Government is seeking to abolish an individual’s right to sue for personal injury damages because of spiralling public liability insurance premiums.

Small Business Minister Joe Hockey says the issue was the most significant challenge facing small business and the only solution was to look at rebuilding the common law litigation system. Mr Hockey will need the full cooperation of State and Territory governments. Because of the complexity of the State-based common law system,

Mr Hockey needs to gain support from State levels so they refer their power to the Commonwealth.

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