News Wrap

IN THIS morning’s News Wrap: economy rides Abbott victory as shares hit five-year high; Fortescue’s transport row heads towards arbitration; and Rio and new Oyu Tolgoi board to talk financing.

Staff Reporter

Economy rides Abbott victory as shares hit five-year high

International investors are boosting their exposure to Australian shares on the back of the Coalition's election win, with expectations of improved political stability, a recent fall in the dollar and signs of ongoing economic strength in China putting local stocks back on the radar, according to The Australian.

As the stockmarket hit a five-year high and consumer confidence peaked at its highest since 2010, Asian-based investors managing funds worth hundreds of billions of dollars told The Australian that recent events were bolstering the case for increased investment in Australian shares.

Fortescue’s transport row heads towards arbitration

Andrew Forrest’s Fortescue Metals Group appears headed for arbitration, with the iron ore juniors trying to gain access to the company’s Pilbara rail network through the Economic Regulation Authority of Western Australia, according to the Australian Financial Review.

Both Brockman Mining and Flinders Mines have made applications to the ERA seeking access to Fortescue’s rail line as a transport solution for their respective Pilbara projects.

The ERA recommended last month that Fortescue start negotiations for a rail-sharing agreement with Brockman, in keeping with third-party provisions in the state agreement governing its infrastructure subsidiary, The Pilbara Infrastructure (TPI).

Rio and new Oyu Tolgoi board to talk financing

The board of Rio Tinto majority-owned Oyu Tolgoi has appointed a new chief executive for the $US6.2 billion ($6.7 billion) Mongolian-based copper mine, but has yet to negotiate a financing agreement to fund its second stage, according to the Australian Financial Review.

The board appointed chief marketing officer for Rio Tinto Copper – Craig Kinnell – as Oyu Tolgoi president and chief executive on Wednesday. He succeeds Rio executive Cameron McRae, who steps down from the role in October after three years at Oyu Tolgoi and 27 years of service at Rio.

Chairman of the Oyu Tolgoi board of directors Batsukh Galsan said Kinnell’s experience running mines and selling minerals at international market prices made him the perfect choice to successfully lead the project.