Archive for December, 2010

Protests intensify in Bolivia over gasoline prices

Thursday, December 30th, 2010 | Finance News

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LA PAZ, Bolivia – Protests intensified in Bolivia on Thursday against a sharp increase in fuel prices imposed by President Evo Morales' government. Thousands of demonstrators marched in La Paz and other cities, calling for the price hikes to be repealed. Some demanded Morales' resignation.

The higher prices were announced suddenly on Sunday, and it has been the most unpopular measure of Morales' five-year presidency. It led to an immediate 73 percent jump in gasoline prices and an 83 percent rise in prices for diesel — and also prompted rapid increases in transport and food prices in the Andean country.

Taxi drivers held a strike that largely paralyzed La Paz on Thursday to denounce the higher prices, and protests were also held in the cities of Cochabamba, Santa Cruz and Oruro.

Demonstrators set afire a car and a tollbooth on Thursday in the city of El Alto, neighboring La Paz. People lined a bridge while protesters raised fists demanding the measure be repealed.

Fuel prices had been frozen for six years, but the government said it could no longer afford to subsidize them, especially since much is smuggled across the border to neighboring countries.

Responding to the protests, Morales' government has announced steps aimed at mitigating the economic effects — including 20 percent salary increases for public workers aimed at offsetting higher fuel prices. The government also announced new assistance to rice, corn and wheat farmers intended to increase production and bring down prices.

Demonstrators have called their protest the "gasolinazo."

Neighborhood protest leader Claudio Luna said in La Paz that the government's "message hasn't met the expectations of the population, and for that reason we're going to continue the protests." He said demonstrators want prices lowered back to their former levels.

Bus drivers have also held sporadic protests this week, demanding the government further increase fares. Authorities ordered raises of 60 to 80 percent in public transport fares, but bus drivers argue that isn't enough to offset the higher costs.

Food prices have also risen 15 percent in subsidized government markets, but that remained much less than in private supermarkets. People seeking bargains lined up at a state-run food store in La Paz on Thursday.

Morales, meanwhile, said in a news conference that he is inviting advisers from Paraguay's government to help formulate additional measures to lessen the blow of eliminating fuel subsidies.

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China may not issue new 2011 rare earths export quota: report

Thursday, December 30th, 2010 | Finance News

BEIJING (Reuters) – China may not announce a second rare earths export quota in 2011, the official China Securities Journal said on Friday, after Beijing raised international concern by cutting exports of the minerals next year.

The report cited unidentified government sources as saying Beijing may not announce additional 2011 export quotas for the essential minerals.

The Ministry of Commerce usually announces export quotas twice a year.

China rattled trade partners this week by cutting its export quota on rare earths by 35 percent for the first half of 2011 from a year earlier.

In part to appease those who have spoken against the export quota, including the European Union and the United States, China said this week it had not decided on a full-year export quota for 2011.

China supplies 97 percent of the world's rare earths, a class of 17 related minerals used to make electronics and clean energy technology including computers, wind turbines and electric cars.

(Reporting by Zhou Xin and Koh Gui Qing; Editing by Chris Lewis)

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Anadarko good fit for BHP say investors, as rumor fuels bid

Thursday, December 30th, 2010 | Finance News

SYDNEY (Reuters) – U.S. oil and gas firm Anadarko (APC.N) would be a good strategic fit for BHP Billiton (BHP.AX) (BLT.L), investors said on Friday, as fresh speculation swirled the global miner was looking at the target, but banking sources were unaware of any imminent offer.

BHP, under pressure to land a big acquisition after losing a $39 billion bid for Canadian fertilizer giant Potash Corp (POT.TO) earlier this year, declined on Friday to comment on the rumors which drove Anadarko's shares as much as 8 percent higher in U.S. trade.

An unsourced report in Britain's Daily Mail said BHP Billiton may offer $90 per share, putting the miner's growth strategy back in the headlines during quiet holiday trade.

Anadarko's shares surged to their best level since mid-2008, exceeding highs reached before BP's (BP.L) Gulf of Mexico Oil spill. Anadarko owns 25 percent of the ruptured Macondo well that BP operated.

BHP shares meanwhile eased 0.6 percent in early trade, broadly in line with the overall market's (.AXJO) 0.5 percent drop.

Anadarko, which has a huge portfolio of deepwater oil and gas discoveries, has been touted as a likely takeover target for BHP since the Canadian government blocked the Potash bid in November.

Investors said BHP has grown so big in mining, takeover attempts would run into regulatory opposition, and the oil and gas sector, where it is relatively small, was the easiest path for the company to go.

Australian oil and gas play Woodside Petroleum (WPL.AX) has also been cited as a potential target after Royal Dutch Shell (RDSa.L) sold its stake in November.

"It is far from a done deal obviously but there is probably a higher probability of BHP buying Anadarko than Woodside (WPL.AX)," said Tim Schroeders, portfolio manager at Pengana Capital.

"The portfolio of exploration and assets in Anadarko would be appealing to BHP and the stock has probably suffered in terms of fallout from the BP situation in the Gulf of Mexico so it might be an opportune time for BHP to make a step change in terms of that portfolio," he said.

One source familiar with BHP's thinking but not directly working with the company downplayed the Daily Mail report as unreliable.

A second source, an investment banker who has previously worked with the miner, said BHP traditionally surprised the market by bidding for a target which had not been the subject of long-running speculation.

However, fund managers and analysts said a BHP acquisition of Anadarko made sense for the miner.

"They have a lot of good assets around the world, they would be a good buy for someone," Mike Breard, an oil analyst with Hodges Capital Management in Dallas, said, adding that Anadarko's future liability for the Gulf oil spill was still a big unknown.

"It's not new but for whatever reason it's finding traction again this morning," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

A spokesman for Anadarko said it was company policy not to comment on speculation.

Shares of Houston-based Anadarko rose to a session high of $76.50, eclipsing a 52-week high of $75.07 reached on April 15, just days before the rig explosion and oil spill that spewed more than 4 million barrels of crude into the Gulf.

The stock later pared some gains, but ended up 6.9 percent at $75.59.

After the spill, shares of Anadarko slid to a low of $34.54 as investors worried over the company's liability in the disaster that left 11 workers dead and caused the worst U.S. offshore oil spill.

(Reporting by Michael Smith in Sydney and Anna Driver in Houston; editing by Balazs Koranyi)

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