3:00 AM New York, 7:00 PM Sydney - Rio Tinto and Chinalco to jointly develop Simandou iron ore project in Guinea. The securities regulators approve a rival trading platform to ASX Ltd. Amcor faces A$697 million lawsuit.
The Australian stock market rose 0.2% buoyed by rising resource stocks as gold prices increased. European leaders are increasingly expressing their resistance to offer a bailout to Greece and the country may be forced to turn to the International Monetary Fund.
Gold prices advanced 0.1% to $1,125 per ounce.
In Sydney trading ASX 200 Index rose 0.2% or 9.1 to 4,872.20.
Of the ASX 200 index stocks, 105 gained, 72 fell, and 23 were unchanged. Extract Resources led gainers in the index shares with a rise of 14.4% followed by Eastern Star Gas climbing 11.4%.
Other resource stocks gained. Paladin Energy edged up 2.5% to A$4.06 and Minara Resources increased 2.4% to A$0.84.
The Australian dollar increased 0.1% to 92.15 U.S. cents.
Rio and Chinalco to Develop Simandou Project
Rio Tinto chief executive Tom Albanese said today in a statement the company has entered into a non-binding agreement with Chinese company Chinalco to jointly develop the Simandou iron ore project in Guinea.
Under the deal, Chinalco will pay $1.35 billion for an initial 47% stake in the project, which is estimated to have 2.5 billion tons of “high quality” iron ore.
“We have long believed that Rio Tinto and Chinalco could work together on major projects for mutual benefit. We believe the Simandou project is a large scale, long life asset and is the single best undeveloped source of high grade iron ore,” said Albanese.
ASIC Proposes Rival to ASX Ltd
The Australian Financial Review reported today that the Australian Securities and Investments Commission has recommended to Financial Services Minister Chris Bowen that Europe-based Chi-X must be given a license to operate a separate stock trading platform in the country.
Chi-X, if granted a license, will rival exchange operator ASX Ltd.
The ASIC is now responsible for the oversight of real-time trading on licensed markets after a Senate vote last week.
Amcor Faces A$697 Class Action
Amcor is facing a class action commenced by Jarra Creek Central Packaging Shed for its involvement in price fixing in the Australian packaging market in 2007 that may lead to court imposing damages of A$466 million plus an estimated A$231 million in interest.
Although the company’s rival was slapped with a A$36 million fine, Amcor was granted immunity for tipping off the competition regulator.
“Amcor strongly disputes the estimate put forward and will dispute the facts and assumptions upon which the report appears to be based,” said the company in a statement.
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