The Star Online: Business
The Star Online: Business |
- India's GVK pays $1.26 billion for stake in Australia's Hancock
- Conflict gold guidelines "No. 1 priority" for LBMA
- UK's Cable plans clampdown on executive pay
| India's GVK pays $1.26 billion for stake in Australia's Hancock Posted: 18 Sep 2011 05:47 PM PDT NEW DELHI (Reuters) - India's GVK Power & Infrastructure will pay $1.26 billion for a majority stake in three Australian coal mines and a port and rail project owned by Hancock Group to secure long-term coal supplies for the Indian group's power projects. The Indian infrastructure group will acquire a 79 percent stake in the Alpha and Alpha West coal mines in the Galilee Basin, and will buy Kevin's Corner coal mine and the rail and port project connecting the coal mines outright, it said in a statement late on Friday. "At full production the three coal projects are together expected to supply about 84 million tons per annum to the global sea-borne coal market," GVK said in a statement adding most of the coal from the projects was meant for Asian markets. The deal ends months of talks, which began in February and have been extended through the year. GVK will pay $500 million initially to Hancock, $200 million after one year, and the remainder on financial close of the project, which is expected to be 2012, it said adding the deal would be funded by bank loans. The first phase of production, scheduled to start in 2014, is expected bring in more than 30 million tons per year of thermal coal, it said. Indian energy firms have been scouting for overseas coal assets, typically in Australia, Indonesia and Africa, to feed power plants at home. India holds 10 percent of the world's coal reserves, but local supplies are falling short as the country builds more power plants and as domestic coal projects run into environmental and land acquisition delays. Last year India's Lanco Infratech bought coal mines from Australia's Griffin Coal for an undisclosed sum, while Adani Enterprises agreed to buy Galilee coal project from Australia's Linc Energy for $2.7 billion. In May this year, Adani unit Mundra Port and Special Economic Zone agreed to buy Abbot Point Coal Terminal in Australia for $2 billion in an all-cash deal to tap into growing coal traffic in overseas markets. |
| Conflict gold guidelines "No. 1 priority" for LBMA Posted: 18 Sep 2011 05:44 PM PDT MONTREAL (Reuters) - The London Bullion Market Association is working out ways for refiners on its Good Delivery List to avoid falling foul of new regulations against conflict gold as a "number one priority," LBMA chairman David Gornall told Reuters on Sunday. Due diligence requirements for gold sourced from the war-torn Democratic Republic of Congo are currently under consideration by both the United States and the Organization for Economic Cooperation and Development. A proposal being considered under the Dodd-Frank financial oversight law would require companies to disclose whether they use "conflict minerals," like gold, from the DRC. The LBMA, whose Good Delivery List of refiners is the gold industry's chief source of high-quality bullion, says the proposal could be disruptive to the refining industry if it is not swiftly addressed. Speaking on the sidelines of the LBMA's annual conference here, Gornall said: "We will issue guidance on conflict gold due diligence so that it is practical for the refiners and credible for the outside world." "The aim would be that the LBMA's guidance will become the OECD's guidance. We are after all the ultimate authority on physical gold, and therefore there can't be anybody better placed to do it than us," he added. The association hopes to deliver guidance to members by the end of this year or early 2012, he said. The World Gold Council, the largest industry group representing global gold miners, said in June that it had proposed standards allowing miners to certify their gold production as conflict-free. But refiners have additional problems in proving the provenance of scrap gold they receive, 1,645 tons of which was returned to the market last year. "If you've got primary mined gold, it is pretty straightforward where it's come from and you can prove it," said Gornall. "It's the scrap that is" the problem. "We are going to have to get to the stage where... we take everything that is in existence at the moment from a good delivery refiner to be considered as conflict free," he said. "We have to draw a line and grandfather everything prior to that." As to whether this prove acceptable to U.S. regulators, he added: "That remains to be seen." Conflict minerals are a hot topic in the United States. Signatories to the Electronic Industry Citizenship Coalition (EICC), including Apple and Microsoft , have agreed to curb the use of uncertified minerals from the DRC. The EICC is pushing gold refiners to agree to spot checks on their activities, Gornall said. "We are trying to do something on a broader basis, that doesn't involve individual audits through every one of the good delivery refiners," he said. "If we can get to a (regulation) that covers not just the conflict gold area but every part of due diligence, we will have done ourselves and the market a great service." The LBMA's conference has been extended into Tuesday afternoon to include a special session on gold market regulation, said Gornall, who took over as the association's chairman in June. Regulatory issues are set to become a key concern in years to come as broader financial market regulation spreads, one LBMA delegate said on the sidelines of the event. |
| UK's Cable plans clampdown on executive pay Posted: 18 Sep 2011 05:42 PM PDT BIRMINGHAM (Reuters) - British companies will be required to publish more details on the pay packages of top executives under a government drive to fix a "disconnect" between remuneration and corporate performance, Business Secretary Vince Cable said on Monday. Pay at the top of Britain's biggest companies has soared in recent years while salaries for workers have barely kept pace with inflation, a politically sensitive issue while the coalition pursues a tough deficit-cutting austerity program. "The disconnect between pay and long-term performance suggests that there is something dysfunctional about the market in executive pay or a failure in corporate governance arrangements," Cable said in extracts of a speech released in advance. "We want to explore what is causing it and how it can be addressed," he added. The announcement, due to be made to members of Cable's Liberal Democrat party at their annual conference, follows previous coalition moves to limit the high level of bonuses paid to bankers, blamed for precipitating the 2008 financial crisis. It comes as the center-left Lib Dems seek to boost their low poll ratings by ruling out cutting top income tax rates for the most wealthy - an ambition of their Conservative coalition partners - before reducing taxes for the low-paid. The public would only accept the government's austerity program to reduce the deficit inherited from the banking crisis if the cuts were seen to be fair, Cable said. "There is a great sense of grievance that workers and pensioners are paying the penalty for a crisis they did not create. I want a real sense of solidarity, which means a narrowing of inequalities ... and the wealthy must pay their share," he added. In recent weeks Cable has been meeting institutional investors to see how to curb what he recently described as "ridiculous levels of remuneration" that were going unchallenged at companies despite little evidence of a correlation with performance. Bonuses for senior executives at leading UK companies jumped from 48 percent to 90 percent of their salaries between 2002 and last year for the same level of performance, Britain's High Pay Commission said this month. Cable will now seek wider views on how to address the issue, including giving shareholders the right to vote down directors' pay packages. At present shareholders can vote on the remuneration of executives but their decision is not binding on the company. The government will also propose tougher disclosure in company reports from October 2012 on the breakdown of director's pay packages. Remuneration committees would be required to justify the pay plans, as well as showing how much executives would be paid in the coming year if performance targets were met. |
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