Growth downgrades
The International Monetary Fund (IMF) has trimmed its 2013 forecast for Australia's economy and warned of sluggish global growth for this year and next. In its latest World Economic Outlook report, the IMF says Australia's economy will grow by 3 per cent next year, a downgrade from its previous April forecast of 3.5 per cent due to a slowdown in commodity exports.
The World Bank has cut its outlook for growth this year in the East Asia and Pacific region and warned China’s economy will face a more pronounced slowdown than expected, lowering its growth outlook to 7.7 per cent from 8.2 per cent forecast in May.
Rio Tinto Limited
(ASX:RIO) has cut its expectations for growth its major customer and the world’s second largest economy China. In a presentation to investors Rio says economic growth in China is robust but moderating and expected to grow at below 8 per cent this year, from an earlier forecast of 8 per cent. Globally Rio sees slow and uneven growth in developed economies and has cautioned risks remain in both Europe and America. Rio is planning further cost cutting due to anticipated volatility in the short term and says total annual capital expenditure on projects already approved is expected to peak this year.
Resources news
China's services sector growth recovered last month from a one year low in August. The HCBC services sector Purchasing Managers' Index increased to 54.3 in September from 52 the month before, remaining above the 50 level which indicates expansion.
Iron ore shipments to China from Port Hedland dropped to 15.1 million tonnes last month. According to the Port Hedland Port Authority shipments for the steel making commodity dropped 9.5 per cent in September from August and were unchanged from the year before. BHP Billiton Limited
(ASX:FMG) and Fortescue Metals Group Limited
(ASX:FMG) are among the port’s biggest users.
Job advertisements fell for a sixth month in September, led by large declines in Western Australia and Queensland following the cancellation of mining projects and public service cuts according to ANZ Banking Group’s
(ASX:ANZ) job advertisements survey. Jobs ads were down 2.8 per cent in September from the month before and 10.8 per cent down from the year before.
Company news
Takeovers
Africa-focussed copper explorer and producer Discovery Metals Limited
(ASX:DML) has received an $830 million takeover bid. Chinese private equity firm Cathay Fortune Corporation has put forward an indicative and non-binding proposal of $1.70 per share to acquire all the shares it does not already own.
Agribusiness Elders Limited
(ASX:ELD) have denied receiving a formal merger proposal from Ruralco Holdings Limited
(ASX:RHL) and announcing it will gain about $3 million from the sale of its stake in SmartFibre.
Oil and gas developer Drillsearch Energy Limited
(ASX:DLS) has offered about $118 million for petroleum explorer Acer Energy Limited
(ASX:INP). Acer would expand Drillsearch’s presence in the Cooper Basin.
BHP local bond issue
BHP Billiton Limited
(ASX:BHP) has launched its first local bond deal in almost a decade. The global miner will issue Australian dollar denominated bonds. Benchmark sales are expected to be about $500 million. Australia and New Zealand Banking Group
(ASX:ANZ) and CBA Commonwealth Bank of Australia
(ASX:CBA) will serve as joint managers. BHP sold $5.4 billion of notes in Euros and British pounds last month.
Aquila Resources project cost blow out
Aquila Resources Limited
(ASX:AQA) has increased its estimates of capital and operating costs for the $6 billion West Pilbara iron ore project in which the coal producer has a 50 per cent stake. Aquila says complying with Western Australian government regulations have incurred additional capital costs. Operating costs are also predicted to rise, impacted by the decision to outsource mining operations.
QR National $1B share buy back
The Queensland government says it will sell a $1.5 billion stake in QR National
(ASX:QRN). Under the terms of the deal, the government will sell $1 billion of shares via a selective buyback to QR National and a further $500 million to a small group of cornerstone investors. The sale will see the government’s stake reduced to16 per cent from 33.9 per cent remaining a significant shareholder. The $1.5 billion sell-off represented a gain of about $400 million to the state’s bottom line.
Oil Search alliance
Oil Search Limited
(ASX:OSH) has inked a strategic partnership with fellow oil and gas company Total. Under the deal both companies will hold equal interests over five licences in Papua New Guinea and work together to explore and appraise the area. Oil Search expects an offshore drilling program will start in the first quarter of 2013.
Arrium to gain $73M from NZ sale
Arrium Limited
(ASX:ARI) says it will gain $73.4 million from the sale of its 50.3 per cent stake in New Zealand listed Steel & Tube Holdings Limited. The mining and materials group says the divestment comes following its steel review which also resulted in the sale of its Piping Systems business. Arrium expects to put the proceeds of the latest sale to reducing debt and gearing levels.
