Today's Business Headlines

18/08/2009 - 06:50

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Super boom forecast as Gorgon go-ahead looms; Miner good as gold after Varanus payout; Fortescue's $7bn shock deal; ASIC push to abolish commissions; Reform call after Storm collapse

Today's Business Headlines

Super boom forecast as Gorgon go-ahead looms
Australia is on the verge of another WA-led resources boom that promises to dwarf the last surge, lock in thousands more jobs and be worth billions of dollars to WA businesses. The West

Miner good as gold after Varanus payout
Goldminer Newcrest has delivered a better than expected full-year profit as a $30 million insurance payment cut damages costs from the Varanus Island gas explosion off the West Australian coast last year. The Australian

Fortescue's $7bn shock deal
Andrew Forrest's Fortescue Metals has rocked iron ore exporters by striking a sweetheart deal that links its supply of discounted iron ore to the Chinese steel industry with up to $US6 billion ($A7.2 billion) in cheap Chinese loans. The Age

ASIC push to abolish commissions
The securities regulator has recommended that the vast majority of remuneration practices used by financial planners be abolished in an admission that investor protection laws are inadequate. The Fin Review

Reform call after Storm collapse
The nation's corporate watchdog has rejected criticism that it should have intervened before Storm Financial collapsed and done more to protect about 3000 investors who lost their life savings. Courier-Mail

 

 

THE WEST AUSTRALIAN:

Page 1: Australia is on the verge of another WA-led resources boom that promises to dwarf the last surge, lock in thousands more jobs and be worth billions of dollars to WA businesses.

Page 4: Federal government debt could be up to $100 billion less than feared as the economy performs better than expected and unemployment defies predictions in the May budget that it would rise.

Private health insurance membership has hit a record high, defying predictions of a mass exodus from funds after the Rudd government cut incentives.

Page 5: Parts of the route miner Magellan Metals will use to transport lead carbonate to Fremantle have lead contamination more than three times above health and environmental standards for residential areas, monitoring has revealed.

Page 9: Labor will wait to the last moment today before deciding whether it will support the Liberal Party and guarantee metropolitan Perth later weekday shopping hours.

Page 10: The owner of the Perth Wildcats basketball team, Jack Bendat, claims the team's future is at risk after repeated delays to the new indoor stadium.

Business: Fortescue Metals Group has ditched a key foundation strategy of letting Rio Tinto and BHP Billiton set the iron ore price, yesterday singing a landmark deal with China that undercuts its bigger rivals and in the process throws the Pilbara's decades-old benchmark pricing system into chaos.

Fortescue Metals Group has secured itself much-needed cash-flow stability and enough debt to deliver on its long-held ambition to rival the Pilbara's big two iron ore producers.

Three senior audit partners at KPMG's Perth office will step down from their roles for up to two years after a long-running investigation by the corporate regulator over their involvement in the collapsed Westpoint property empire.

iiNet has booked a 44 per cent climb in net profit to $25.6 million on the back of higher customer numbers.

Consolidated Minerals has put is Kambalda nickel assets up for sale.

The first high-profile float so far this financial year has got off to a successful start with institutional investors oversubscribing for shares in online advertiser Carsales.com.au.

Iron Ore Holdings boss Mal Randall says he is confident of striking a deal with one of the Pilbara's big three miners to help develop the company's Iron Valley deposit, where he yesterday announced an upgraded resource of 160 million tonnes.

THE AUSTRALIAN FINANCIAL REVIEW:

Page 1: The securities regulator has recommended that the vast majority of remuneration practices used by financial planners be abolished in an admission that investor protection laws are inadequate.

Prime Minister Kevin Rudd has rejected calls for the government's fiscal stimulus to be wound back, declaring the spending to be crucial to economic recovery, as Treasury secretary Ken Henry warned of the risk of a "second shock wave" from the deep global recession.

Andrew Forrest's Fortescue Metals Group has bowed to China's demands for a larger cut to iron ore prices in exchange for a $US6 billion ($7.2 billion) funding package that will underpin a major expansion of its operations.

Page 3: Three partners of KPMG have been banned as registered auditors for periods from nine months to two years after their involvement in auditing Westpoint-related companies.

The fund established by James Hardie to compensate asbestos victims is seeking a government bailout of about $200 million because a prolonged slump in the US housing market could deplete its cash reserves by early 2011.

Page 4: Australia's largest undeveloped resources project, the $50 billion Gorgon gas development, has moved a step closer to final approval within days after the federal and West Australian governments agreed to share long-term liability arising from plans by the proponents to bury carbon dioxide.

Page 6: The Australian Securities and Investments Commission is pushing for financial planners to act as fiduciaries, meaning they must act in the best interests of clients.

Page 8: Business leaders are increasingly upbeat about the prospects for economic recovery and there are calls for the government to consider speeding up plans to return the budget to surplus.

Page 13: Newcrest Mining expects to increase it gold production by up to 20 per cent in the 2010 financial year after delivering a record $248.1 million full-year net profit, slightly ahead of expectations.

Page 14: Amcor shareholders are anticipating a $1.6 billion rights issue to fund a $2.4 billion acquisition of Rio Tinto's Alcan Packaging operations.

 

THE AUSTRALIAN:

Page 1: Australia's relationship with China has plunged to a decade low, with Beijing taking a series of tough measures, including cancelling high-level visits, to convey its displeasure with the Rudd government.

The Black Saturday bushfires royal commission has been scathingly critical of Victoria's fire services and of Country Fire Authority chief Russell Rees, finding he failed to take on an operational role "even when the disastrous consequences of the fires began to emerge".

Page 2: Hundreds of non-union workplace agreements could be struck out following a court decision that employers warn paves the way for unions to pressure companies into union deals.

Poor projected take-up from the first roll-out of the National Broadband Network, in Tasmania, suggests the $43 billion project will be a "monumental waste of taxpayers' money", the Coalition claims.

Page 3: Canberra will use new figures showing continued growth in private hospital membership to counter the opposition's bid this week to block $1.8 billion in budget cuts to the health insurance rebate in the Senate.

Victims of the mortgage fund freeze who are suffering hardship can now pull up to $100,000 a year from their accounts, under new relief rules announced by ASIC last night.

Page 4: Treasury secretary Ken Henry has warned there is still the chance of a second shock that could hit the Australian economy, and it is too early to declare victory over the global economic downturn.

Australia must bankrupt -- as well as jail -- the Mr Bigs of the criminal underworld if police are to make any headway in the fight against organised crime.

Where Treasury secretary Ken Henry is expressing surprise at the strength of the economy, Reserve Bank Governor Glenn Stevens is saying "I told you so".

The Rudd government has accepted key amendments to its plans to promote renewable energy, which allow it to be treated separately to its emissions trading scheme, but doubts persist within the Coalition about adopting Labor's compromise.

Page 5: ABC Learning founder Eddy Groves could face a public examination over his dealings with the collapsed childcare company he founded, while future court action could be taken to reverse deals made in the months before ABC's collapse.

Labor senator Claire Moore has urged Anna Bligh to swing behind a renewed push to decriminalise abortion in Queensland, saying the Premier could "not hide" from the use of the existing law to prosecute a young couple in Cairns.

Alexander Downer, the chief fundraiser for the South Australian Liberal Party, has rejected calls to cancel two cash-for-access events this week, warning that it would lead to the end of the party.

Page 6: The federal government has missed its chance to purchase water from Cubbie Station.

Page 8: In a scathing post-mortem on the handling of Black Saturday's most deadly blaze, the royal commission has identified a series of worrying failures at the emergency services nerve-centre in Melbourne and in the local incident control centre at Kilmore.

Business: Andrew Forrest's Fortescue Metals Group has delivered another blow to the ailing benchmark iron ore pricing system, offering to sell the commodity at the lowest price negotiated this year in return for $US6 billion ($7.3bn) of cheap funding from China.

Three partners of accountancy giant KPMG have been banned from acting as auditors for periods of up to two years over their involvement in the $390 million collapse of the Westpoint property empire.

Japan is growing again, with June-quarter GDP figures showing the world's second-largest economy has emerged from its longest, deepest recession in post-war history.

Bluescope Steel has blamed an unprecedented drop in steel demand for a bigger-than-expected annual loss of $66 million and, despite seeing an improvement in its markets, has flagged a small loss for the first half of this financial year.

Goldminer Newcrest has delivered a better than expected full-year profit as a $30 million insurance payment cut damages costs from the Varanus Island gas explosion off the West Australian coast last year.

Arrow Energy rose almost 3 per cent yesterday following speculation that its Queensland coal-seam gas partner, Shell, was preparing a takeover bid to shore up reserves for its multi-billion-dollar Gladstone liquefied natural gas ambitions.

ING Bank (Australia) has posted a record net profit of $141.6 million for the six months to June, up $61m on the previous corresponding period.

Centro Properties Group has offloaded more than 50 shopping centres across its US operations for $US500 million ($610m) in the past financial year.

The Challenger Financial Group is expected to sell its mortgage aggregation business, most likely to the National Australia Bank in a deal expected to be announced to the market as early as today.

It's tough at the top -- especially, it seems, in a recession. The chief executives of the US's 1000 leading companies saw a total of $US53 billion ($63.7bn) wiped off their personal wealth last year, shrinking their assets by more than 40 per cent and leaving many "demoralised" and hard done by.

The US crackdown on clients of UBS is widening into a global hunt, with the government detailing in court documents how the Swiss bank and outside advisers helped Americans hide money using enterprises set up in Hong Kong.

Australian shares have closed more than 1.5 per cent lower, falling from a 10-month high, as banks ended a recent price surge and big miners declined following weaker metal prices.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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