Mining stocks market movers

General News

Resources and mining companies dominating the headlines this past week include Murchison agreeing to sell its stake in the Oakajee Port and Rail Project and Crosslands Resources, Bluescope shares tumble after unveiling plans to raise $600 million, Woodside's production forecast falls short of expectations, OneSteel denies reports the Whyalla steel operation could be closed in a year and Paladin's chief cuts his own salary by 25 per cent. And in resources news, the minerals resource rent tax (MRRT) is voted through the Lower House.

Murchison sells Oakajee and Crosslands stake
Shares in Murchison Metals Limited (ASX:MMX) jumped more than 60 per cent after exiting a trading halt and announcing it has agreed to sell its stake in the $6 billion Oakajee Port and Rail Project and Crosslands Resources. Murchison has inked a deal to sell its 50 per cent interest in the iron ore-related projects to its joint venture partner, Japan's Mitsubishi Development Pty Ltd, for $325 million. Murchison was forced to admit it would not be able to fund its equity share of the projects. Once the sale is finalised Murchison says it will have no requirement to continue funding the development of the projects. The deal is subject to some conditions and will be put to a shareholder vote in February 2012, subject to no better offer emerging.

Bluscope tumbles in response to share issue
Shares in Bluescope Steel Limited (ASX:BSL) tumbled in high volumes after exiting a trading halt, having earlier unveiled plans to raise $600 million through a share issue. The steel maker has launched a four-for-five accelerated renounceable entitlement offer at an offer price of 40 cents per share. The entitlement offer is geared toward creating a more appropriate capital structure. The company says its earnings continue to be impacted by a strong Australian dollar, low steel prices, high raw material costs and softer demand in Australia.

Woodside production target below expectations
Woodside Petroleum Limited (ASX:WPL) has set a production target for the 2012 calendar year 27 per cent higher than the current year. Woodside's Pluto liquefied natural gas project is coming on stream, adding up to 21 million barrels of oil equivalent (boe). Production in 2012 is set to be 73 to 81 million boe in total, the forecast falling short of most analysts' expectations.

OneSteel denies Whyalla closure
OneSteel Limited (ASX:OST) has denied reports a one year deadline has been set to turn around the manufacturing operations or face closure of Whyalla's steel operation. Chairman Peter Smedley says a review of loss making manufacturing operations is continuing, with the hope of returning them to profitability. Mr Smedley, speaking at the company's annual general meeting, says economic uncertainty is weighing on confidence and there aren't any signs of improvement for the steel sector. OneSteel is pushing ahead with a further 310 job cuts, having already shed 770 full time jobs.

Paladin cuts include CEO's pay
Paladin Energy Limited (ASX:PDN) chief executive John Borshoff has pledged a variety of cost-cutting measures, including a cut to his own salary by 25 per cent. But it wasn't enough to stop 18 per cent of shareholders voting against the miner's remuneration report at its annual general meeting. Fairfax Media reports the cut may be extended beyond the 12-month term, if such drastic measures are needed to salvage the company.

Resources News
The minerals resource rent tax (MRRT) has been voted through the Lower House. The legislation is now on its way to the Senate, where it will be voted on next year, after some amendments have been made. One change, vital for securing the support of key crossbench MPs, includes raising the threshold to $75 million from $50 million. The MRRT is forecast to raise more than $11 billion in its first three years.

Melissa Beaumont Lee