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PRESS DIGEST-Australian Business News - Jan 24

Source: Thomson Reuters Foundation - Wed, 23 Jan 2013 19:37 GMT
Author: Reuters
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Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.

THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

AustralianSuper attempted to oust News Corporation chief executive Rupert Murdoch as chairman and remove his son James from the conglomerate's board last year, the A${esc.dollar}55 billion fund revealed yesterday. AustralianSuper teamed up with other major international investors such as British fund manager Hermes to encourage News Corp to elevate more independent directors. Page 13.

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Rio Tinto has refused to delay its decision on whether it will halt production at its Gove alumina plant in the Northern Territory (NT), despite a direct appeal from Northern Territory Chief Minister Terry Mills. Mr Mills asked the miner to wait another eight months, but Rio will maintain its original deadline of January 31 despite the NT Cabinet approving the conditional restructuring of a gas supply deal. The contract was altered to free up supplies for the Gove facility. Page 13.

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Analysts are concerned that BHP Billiton's first half underlying earnings could be affected by impairments on its nickel and aluminium divisions. Goldman Sachs has estimated between US${esc.dollar}2 billion to US${esc.dollar}3 billion could be written off BHP's aluminium arm, while the company has already announced its Ekati diamond mine will be devalued by US${esc.dollar}200 million. The miner is expected to announce underlying earnings of US${esc.dollar}6 billion for the half year, 40 percent lower than the same period a year ago. Page 13.

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Robert Cooke, chief executive of Healthscope, yesterday announced the healthcare center operator had shut 44 of its collection centers and fired 70 workers as part of a restructure relating to the Australian Capital Territory and New South Wales. Figures from Australian Medicare show the reduction in centers equates to 7.3 percent of Healthscope's total network. Rivals Primary Health Care and Sonic Healthcare are expected to benefit as a result. Page 15.

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THE AUSTRALIAN (www.theaustralian.news.com.au)

BHP Billiton is expected to reduce by A${esc.dollar}3.8 billion the book value of its nickel and aluminium assets in Australia next month, with analysts forecasting the two divisions to record around US${esc.dollar}600 million in losses this financial year. The miner released a strong production report yesterday for the first quarter, with BHP's major commodities divisions - such as iron ore, copper, coking coal and petroleum - mostly meeting analysts' expectations. Page 17.

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David Trebeck, chairman of Penrice Soda Holdings, yesterday was confident that a restructuring plan for the soda ash manufacturer would be supported by shareholders tomorrow. The company is the first in Australia to confront a possible board spill under the "two strikes" regulations. The restructure will result in 60 workers being sacked, the closure of Penrice's chemical plant in South Australia later this year and soda ash being imported from the United States. Page 17.

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Telstra yesterday was confident that its new Global Applications and Platforms unit would become a major source of revenue for the Australian telecommunications giant within three years. The software developer will employ 70 workers and will identify possible streams of revenue by creating new mobile phone services and applications for companies and consumers. Page 17.

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Sam Walsh, chief executive of Rio Tinto, yesterday said the company needs to be more respectful of the shareholder's investments after A${esc.dollar}33 billion in impairments over the last five years. Rio has written off nearly US${esc.dollar}30 billion of the US${esc.dollar}39 billion it paid for aluminium producer Alcan in 2007, leading largest shareholder BlackRock to complain about the recent performance of major miners. "It's incredibly frustrating  to see these companies be as reckless and profligate with the shareholder capital," BlackRock's Evy Hambro said. Page 17.

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THE SYDNEY MORNING HERALD (www.smh.com.au)

Figures released by the Australian Bureau of Statistics yesterday showed a 3.7 percent increase in private sector wages for the year to the third quarter of 2012. The bureau also revealed a 0.2 percent rise in the consumer price index for the December quarter and a 2.2 percent jump for the year. The Australian dollar dropped by a quarter of a cent following the news, and was trading around US105.40 cents yesterday afternoon. Page B1.

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Australia's three major mobile phone network operators yesterday confirmed they would participate in the Federal Government's auction for mobile spectrum, despite the companies complaining last year about an increase in the reserve price. Vodafone Hutchison Australia announced its intention to bid for the 2.5 GHz band, while Telstra will bid for both the 2.5 GHz and 720 MHz bands. Commonwealth Bank of Australia analysts calculate Telstra will spend around A${esc.dollar}2.6 billion on the auction. Page B2.

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The loss of a multi-million dollar agreement with Air New Zealand has forced Qantas Airways to call for voluntary redundancies among ground staff at Sydney Airport's international terminal. A spokesman for Qantas said while the loss of the contract was being evaluated, it was not expected to force compulsory redundancies. That view is shared by the Australian Services Union, which represents customer service staff at the airline and will meet with Qantas management on Friday. Page B2.

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Cement maker Boral yesterday announced stronger than anticipated earnings for the second half of calendar 2012, revealing a A${esc.dollar}52 million net profit for the period. Shares in the company closed unchanged, however, as there was no information on impairments or provisions for the period. Boral previously forecast net profit for the December half to remain consistent with the A${esc.dollar}35 million achieved in the second half of 2011-12. Page B3.

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THE AGE (www.theage.com.au)

Linc Energy yesterday announced it would spin its coal assets into a separate division. The new entity would also retain a A${esc.dollar}2 per tonne royalty from Adani Mining's Carmichael Coal project in Queensland, which is expected to produce 60 million tonnes of coal annually for at least two decades from 2016. Peter Bond, chief executive of the diversified energy group, said Linc's coal unit would "stand on its own two feet". Page B15.

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Pesticide manufacturer Nufarm yesterday revealed that its earnings would be damaged by abnormally dry and hot weather in eastern Australia, fostering concerns of weak earnings for agribusiness sector. The company's share price crashed by 9 percent to A${esc.dollar}5.75 despite stating its operations in Europe and South America would perform effectively and offset any losses from its Australian division. Page B15.

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The Construction, Forestry, Mining and Energy Union is suing Rio Tinto in the New South Wales Federal Court, arguing it discriminated between unionised and non-unionised employees by offering up to A${esc.dollar}120,000 more in redundancy payments to workers on individual contracts when it shut down a central Queensland mine last year. The action is the latest incident sparked by the miner's campaign to reduce the influence of unions among its staff. Page B13.

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The S&P/ASX 200 Index closed 8.7 points higher at 4787.8 points yesterday, while the All Ordinaries enjoyed marginal gains of 0.2 percent to finish at 4812.2. Materials and energy companies performed the best, rising by 0.6 percent and 0.4 percent respectively, while health stocks dived by 1.3 percent. Luke McElwaine, senior trader at RBS Morgans, said Rio Tinto's 0.7 percent fall to A${esc.dollar}66.45 was probably due to investors taking profits following the sacking of former chief executive Tom Albanese. Page B12.

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