Home' InDaily : April 23rd 2010 Contents Electricity. We move it.
Energy is vital to growth.
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level of operating and maintenance efficiencies while
ensuring ongoing reliable and secure high-voltage
We listen. We're switched on to the future.
ElectraNet has developed a long term vision for
the planning and development of the transmission
network in South Australia, titled Network
2025 Vision. ElectraNet works closely with the
South Australian State Government, planning
authorities, industry sector bodies and regional
development boards to identify new opportunities
and provide guidance and direction on future
ElectraNet remains committed to the State's long
term need for an electricity transmission service
that is safe, provides security of supply, is capable
of meeting growing electricity demand, and is
reliable, efficient, responsive and sustainable.
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April 23 - 29, 2010
Global miner BHP Billiton has
revealed possible violations
of anti-graft laws inside the
company, in another blow to the
mining industry s tarnished image.
BHP Billiton said it had found the
possible violations, relating to old
exploration projects, and was now
co-operating with the US Securities
and Exchange Commission (SEC)
and carrying out its own internal
Shortly after the announcement,
BHP Billiton stock fell as much as 22
cents, or 0.5 per cent.
It said the exploration projects
in question had been terminated
before December 2008 and were
"relatively small", but it declined
to give details of the possible
The announcement comes soon
after staff from main rival Rio Tinto
were jailed for bribery in China in
a case that shed an ugly light on the
mining industry, which once again
is in the grip of a commodities
boom fuelled by Chinese demand.
BHP Billiton revealed the
investigation in a single paragraph
in its third-quarter exploration
report, in which it revealed weak
production data, and said in a
separate email that the probe did
not relate to activities in China.
"The company has disclosed to
relevant authorities evidence that
it has uncovered regarding possible
violations of applicable anti-cor-
ruption laws involving interactions
with government officials," it said
in its exploration report.
"The company is co-operating
with the relevant authorities,
including conducting an internal
investigation, which is continuing.
It is not possible at this time to
predict the scope or duration of the
investigation or its likely outcome."
It said it could not make much
further comment on the matter.
But it added: "We can confirm
that the SEC s requests for informa-
tion primarily relate to certain
terminated minerals exploration
projects and not any activity in
China, BHP Billiton s marketing
activities or the sale of any of the
company s products."
The last thing BHP needs
Mining analysts and fund manag-
ers said it would cause uncertainty
among investors at a time when BHP
Billiton needed regulators on its side.
"Given the lack of detail (on the
probe), the market may choose to
sell first, ask questions later," said
Ben Potter, market strategist at IG
BHP Billiton is counting on
world regulators, especially in the
European Union, to approve its
proposed $US116 billion iron ore
joint venture with Rio Tinto in
BHP Billiton and Rio Tinto are the
third- and second-largest producers
of iron ore, respectively, and
operate mainly out of Australia s
rich Pilbara iron ore region. Their
proposed venture is hotly opposed
by steelmakers who claim the
pair would be able to exert undue
influence on prices for iron ore.
"Given they have got enough on
the agenda in terms of dealing with
regulators over the Pilbara joint
venture, this is probably the last
thing they need at this point in time,"
said Tim Schroeders, fund manager
with Pengana Capital.
Adelaide Brighton Ltd s ninth
consecutive record profit in 2009 has
given outgoing chairman Malcolm
Kinnaird the perfect farewell
Adelaide Brighton s net profit
after tax was $123.1 million -- up 1.9
per cent on 2008.
Mr Kinnaird reflected on his
successful period at the company in
the annual report released this week
"In this my last year as chairman
of Adelaide Brighton, I reflect on
the immense pleasure it has given
me to see the company embark on
its current strategic path and the
resultant nine years of growth
in profitability and shareholder
return," he said.
"This represents an average
annual total shareholder
return of 28.2 per cent over
Managing director Mark
Chellew pointed to reduced
borrowings and interest pay-
ments as one of the company s
achieved another increase in
earnings through the early
adoption of price increases
to recover escalation in
costs, a 54.7 per cent reduction in
net borrowings and a 50.4 per cent
reduction interest expense," he said
in the report.
"This was achieved despite a 15
per cent national decline in cement
Part of the company s strategy
in dealing with declines in demand
was to drastically reduce imported
cement and clinker.
"This enabled the com-
pany s cements kilns to continue to
produce at capacity and was a key
factor in optimising profitability,"
Mr Chellew said.
In its economic forecasts the
company predicted concrete
demand across Australia to remain
at 2009 levels -- a slight change to
its forecasts in February when it
predicted a 5 per cent decline -- and
noted that while recovery in the
housing sector is underway, there
is concern about the sustainability
of demand in a tightening cash rate
In its February statement to the
market Mr Chellew had predicted
"the residential recovery has begun,
supported by the first home owner
grant stimulus, lower cash rates and
return of consumer confidence".
But since that prediction, the
Reserve Bank has increased the
Malcolm Kinnaird s 13-year
period as chairman ends at the
company s May 19 AGM where
former CEO and managing director
of FH Faulding Chris Harris takes
Shares in the Adelaide-based
construction materials and lime
producing company traded around
$2.89 during the week.
A fully franked dividend of
eight cents a share was declared
in February, bringing the full-year
dividend to a total 13.5 cents.
IronClad Mining Limited and
Trafford Resources Limited,
participants in the Wilcherry Hill
iron ore joint venture, have signed
a Memorandum of Understanding
(MOU) with MCCM Capital
Management Co. Ltd (MCMC)
under which MCMC can earn a 50
per cent interest in stage one of the
Wilcherry Hill iron ore project in
South Australia by agreed expendi-
ture of $35 Million.
The MOU provides for a total of
120 days for MCMC, IFE and TRF to
enter into a stage one joint venture
Upon completion of MCMC s
expenditure, the stage one joint
venture will be 50 per cent MCMC,
30 per cent IFE and 20 per cent TRF.
IronClad retains 80 per cent of the
remainder of the Wilcherry Hill and
The formal agreement emanating
from the MOU will be subject to IFE
shareholder approval as well as the
normal Australian and Chinese
regulatory approvals. MCMC s
funding will be drawn from the
capital of a mining fund sourced
from Asia- Pacific institutional
investors and Chinese private
steel enterprises. Its investment
strategy is to support Australian
mining companies through capital,
technology and marketing, and to
build a bridge between Australian
mining and trading companies and
Stage one of the Wilcherry Hill
project will produce high-quality,
low-containment Direct Shipping
It is anticipated that stage one,
which is being fast-tracked into
production by the end of this year,
will deliver up to two million tonnes
a year for at least three years of DSO.
BHP corruption claims
Fine farewell for Adelaide Brighton chairman
CODAN LIMITED (CDA)
Codan has upgraded FY10 operating NPAT guidance to
$30 million due to continued strong demand from the
artisanal gold market which has driven sales of Minelab's
gold detection products.
In addition, Mike Heard announced he is retiring as MD to
be replaced by Donald McGurk, the current head of the HF
business. McGurk has been with Codan since 2000 in a
variety of positions and we regard this as a relatively low
risk appointment given the incoming CEO already has a
strong knowledge of the business.
The longer term outlook for the Company's products
is positive and our conÞdence in the sustainability of
demand from the artisanal gold market is increasing.
Due to the nature of the business, management does
not have a great deal of visibility which makes Codan a
higher risk investment. Despite this we have upgraded our
recommendation to Outperform.
Sharebrokers and Investment Advisers
Telephone (08) 8217 3900
Warning (General advice only): Past performance is not a reliable
indicator of future performance. The recommendation in this
advertisement is made without reference to its appropriateness to
your investment objectives, financial situation and particular needs.
Before acting on this general advice, you should discuss with your
investment adviser the appropriateness of this recommendation to
your own specific circumstances.
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