Mining industry sets deadline for negotiations: Economy Roundup

The mining industry has given Prime Minister Julia Gillard a deadline of this Friday to work out a compromise regarding the proposed resources super profits tax or the hostile mining advertising campaign will continue.

“The ads could start up earlier if required,” Association of Mining and Exploration Companies chief executive, Simon Bennison, told The Age newspaper.

“I have really serious doubts about the government’s commitment to finding a workable solution. They have had four days to get something to us.”

Fairfax has also reported that negotiations between mining executives, treasurer Wayne Swan and resources minister Martin Ferguson are set for next Wednesday.

Gillard has publically said she will make the negotiations a key priority over the next few weeks.

Meanwhile, according to a Business Spectator Accenture Pulse survey of chief executive sentiment, Australian CEOs want Gillard to find a compromise or drop the tax entirely.

Additionally, the CEOs also said they are concerned that higher salaries mean it will be harder to find skilled staff.

Meanwhile, engineering group Downer EDI has clarified its cash position in response to media reports suggesting the company may have withheld payments to suppliers.

A statement to the Australian Securities Exchange states the company has “ample liquidity” with over $600 million in facilities and cash balances.

“The $35 million referred to relates to both identified collectable debtors and a proposal to manage creditor payments,” Downer said in the statement. “Downer will continue to manage its debtors and creditors to ensure a strong and balanced focus on total management of working capital.”

The company also announced it expects relevant debtors to be paid before the end of the year.

New reports suggest Virgin Blue is increasing its attack on Qantas in the domestic business travel market. It has acquired two senior executives from Qantas, according to the AFR – Qantas general manager of government and international relations Jane McKeon and head of pricing Will Owens.

It is also understood the Virgin will change its ticket pricing, increase presence in the ACT and provide benefits to government and business travellers.

Shares flat after weak Wall Street leads

The Australian sharemarket has opened flat today following disappointing leads from Wall Street, where weak economic data has dampened investors’ hopes of a quick recovery.

The benchmark S&P/ASX200 index was up 16 points or 0.37% to 4400.9 at 12.00 AEST, while the Australian dollar was also slightly up to US87c.

ANZ shares were up 0.5% to $22.40, while Commonwealth Bank shares jumped 0.3% to $50.12. Westpac was up 1.3% to $21.79, while NAB shares were also up 0.9% to $23.75.

Agribusiness ASB says the sale of its Geneva business to US group Gavilon is taking longer than expected.

Both companies announced in March a non-binding memorandum of understanding regarding the sale of AWB Geneva and the 50-50 joint venture of AWB’s Australian commodity management business.

But AWB said yesterday the transaction is taking longer than expected. It now expects a full agreement to be completed in July.

Guinness Peat Group has terminated executive director Tony Gibbs’ position, and has announced plans to appoint three new directors following Gibb’s public opposition to the plans to demerge the Australia and New Zealand businesses.

“Tony was a great achiever for GPG in earlier times and we worked together, closely and effectively, for nearly 20 years,” GPG chairman Ron Brierley said in a statement.

“More recently, however, there have been increasing difficulties, culminating in last week’s serious breach of boardroom protocol. In the circumstances, there was no alternative to the action taken”.

Meanwhile, Bank of America-Merrill Lynch has now appointed former BHP chairman Don Argus to oversee a new advisory board for Australian business operations.

Bankers relieved after G20 summit

Various banking groups have voiced their relief following the G20 summit in Canada after world leaders proposed to abandon a bank levy.

“We welcome the fact that the G20 has stepped away from imposing an arbitrary timeline for the implementation of new measures and has instead agreed to phase-in requirements agreements as and when national economic conditions allow,” the International Banking Federation said in a statement.

“To be honest, it was more than I expected,” German Chancellor Angela Merkel said regarding the plan to halve deficits by 2013, and balance budgets by 2016. the G20’s non-binding pledge to halve budget deficits by 2013 and balance budgets from 2016.

In the US, stocks fell due to weak performances in consumer-related shares. But investors are still awaiting consumer data which is expected to show manufacturing recovery.

The Dow Jones Industrial Average dropped 5.29 points or 0.05% to 10,138.52.