CSR pushes ahead with demerger, Mining production surges: Economy Roundup

CSR has said it has considered an expression of interest from Chinese group Bright Food Group regarding the acquisitions of its sugar and renewable energy division, but has said its plan to split the division from its core business remains its preference.

The company said its board, which has discussed the Chinese offer, had decided the existing demerger plans were “in the best interests of shareholders”.

Additionally, it also said the statement from Bright Food did not include “any proposal capable of acceptance” and was “merely an expression of interest”.  The company intends to hold a shareholder vote on the proposed demerger in February.

The Australian share market has opened weaker this morning despite rises on Wall Street, where good results from chip manufacturer Intel gave investors confidence.

The benchmark S&P/ASX200 index was down 31 points or 0.65% to 4866.4 at 12.10 AEST, while the Australian dollar remained steady at US93c.

Commonwealth Bank shares lost 0.5% to $56.53, while NAB lost 0.8% to $26.83. Westpac lost 0.7% to $25.19, while ANZ also lost 0.6% to $22.27.

Rio Tinto announces 49% output increase

In the mining sector, Rio Tinto has announced a 49% increase in fourth-quarter iron ore output, and has announced that a recovery is currently underway in most of its commodity markets.

Ore production jumped 13% to 217 million tonnes, while sales reached a new quarterly record of 61 million tonnes.

Chief executive Tom Albanese announced the figures, saying solid demand had increased sales with expectations of good results over the year despite a warning regarding the pace of recovery.

“In the Pilbara we achieved record sales for both the quarter and the full year and both global and Pilbara production set new records in 2009,” Albanese said.

“We made good progress in divestments with $1.85 billion of sales completed in the fourth quarter and have now agreed sales of $US10.3 billion since we began the divestment programme in 2008.”

Construction materials manufacturer Boral has said it could become a buyer and seller of assets once a review of its operations by new chief executive Mark Selway is completed, the said in an interview with Business Spectator.

“Our North American business obviously has gone from very substantial profits to losses in recent times. That’s a factor of the market coming down from 2.2 million starts to 590,000 in the last quarter. Managing through that downturn is incredibly difficult.” 

“We need to be ready for the upside, because at some point, and I think we have seen the bottom albeit at a very, very low base, Boral needs to be ready to capitalise on those opportunities, so a lot of focus in the short term is about our North American assets; making sure that we’ve managed those as well as we can and getting that business ready, so that we can capitalise on the upside as the market recovers.”

Macarthur Coal back to full production, Wall Street stocks up

Macarthur Coal has announced it expects profits in the six months to December to fall in the $37-42 million range, and said it is now back to full production.

The company announced 2009 sales volume reached 2.8 million tonnes, while full year sales are expected to come in the range of 4.8-5 million tonnes.

 “It is pleasing to see the strong recovery in sales and that we are now back to full production,” chief executive Nicole Hollows said in a statement. 

In the US, president Barack Obama has put forward a proposal for Wall Street banks to pay back up to $US117 billion in order to reimburse taxpayers for the financial bailout paid in late 2008.

“My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people,” Obama told reporters.

The call comes as Congress is wrapped up in an investigation into the global financial crisis, with the heads of several large banks testifying before a committee. Treasury secretary Timothy Geithner is also expected to appear.

Meanwhile, chip manufacturer Intel said its fourth quarter revenue had increased, with a gross profit margin of 65%. Net income totalled $US2.3 billion, with revenue rising to $US10.6 billion.

The result ignited a rally in technology stocks, with the Dow Jones Industrial Average gaining 29.78 points or 0.28% to 10,710.55.