Mining Shares in Asia Gain on Possible Review of Aussie Mining Tax
In Hong Kong mining companies gained ground after Australia's new prime minister, Julia Gillard (pictured), said she plans to review her predecessor's proposed tax of 40% on mining profits, due to go into effect in 2012, reports Bloomberg. Asian mining firms have operations as far afield as Africa, Brazil and Australia, and the prospect of paying more than a third of their profits on Australian-mined resources is worrying.
Today Yanzhou Coal Mining, which acquired Australian coal miner, Felix Resources at the end of 2009, advanced 0.9% on the hopes that lower tax will mean higher profits. Citic Pacific, a steel company that makes finished products like gears and springs and is in the midst of digging an iron-ore mine in Australia, rose 0.7%.
Other Hong Kong-listed mining companies sank lower with Chalco, or Aluminum Corp. of China, plunging 2.3% and Zijin Mining falling 1.7%. Meanwhile, energy companies gained with China Resources Power, a coal power plant operator supplying energy to China, gaining 1.5% and Hong Kong & China Gas inching up 0.2%.
Chinese commodity companies declined on worries that economic growth will stall again, reducing demand for raw materials. China Petroleum & Chemical Corp., often referred to as Sinopec, fell 0.6%. The company makes products ranging from synthetic rubber to kerosene and jet fuel. Baoshan Iron & Steel and Hebei Iron & Steel both sank 0.5%. Even gold miners tumbled with Shandong Gold Mining slumping 1.5% and Zijin losing 0.7%. Gold declined 0.7% this morning in London, but still remains near all-time-highs at $1,229 an ounce.
In Japan bad news on U.S. home sales continued to push shares in exporters lower. Sony, the maker of the super-popular PlayStation 3 game console, tumbled 1.1%, and its major competitor, Nintendo, the creator of the Wii slumped 1%. Sanyo fell 3.1%.
Among Japanese carmakers, Mitsubishi Motor dropped 0.9% and Isuzu and Honda both dipped 0.7%. Toyota, which yesterday lost its chief test driver when he was killed in a car accident in Germany driving the new Lexus LFA Nurburgring Edition, reports autoblog.com, fell 0.8%. Car parts suppliers also suffered today with Asahi Glass diving 2.7%, Bridgestone slumping 1.6% and JTekt, which supplies components for Toyota vehicles, sliding 0.6%.
Among Japan's gainers, Fanuc, the industrial robot maker expecting a spike in sales to Chinese factories choosing to automate rather than pay workers higher wages, climbed 2.1%. International contractor Kajima Corp advanced 2.4% and Obayashi gained 1.9%. Both firms are hard at work building the Dubai Metro. Perhaps the best way to get ahead is to find business outside of Japan.