Withering cost cuts across the mining industry have left tens of thousands of people without jobs from the Arizona desert to the Andes — and there is a litany of evidence that the situation is growing worse. International mining companies also have postponed or canceled projects and padlocked the gates to mines as consumers have cut spending on cars, jewelry and housing. Global mining giant Rio Tinto announced last week that iron ore production, used to make steel, tumbled 18 percent in the fourth quarter and said Tuesday its aluminum subsidiary would double previously announced production cuts. Later Tuesday, BHP Billiton, the world’s largest miner, said it would lay off 900 employees and 1,200 contractors at its Australian nickel operations due to a deteriorating outlook for the metal.
IBM expects higher profits
IBM Corp. forecast significantly higher profits for 2009 than Wall Street expected Tuesday, a sign that the company’s focus on high-margin services and software contracts is paying off even while overall sales are slumping. Its shares leaped 4 percent in extended trading. The Armonk, N.Y.-based technology company predicted at least $9.20 per share in profit in 2009. Analysts surveyed by Thomson Reuters were expecting $8.75 a share. The rosy forecast came as IBM reported that fourth-quarter profit rose 12 percent, beating analyst estimates, while sales fell 6 percent, missing the consensus estimate.
Founder’s grandson Toyota’s president
Toyota tapped Akio Toyoda, grandson of the Japanese automaker’s founder, as president Tuesday, paying homage to its roots at a time when the company faces its first operating loss in 70 years. The U.S.-educated Toyoda, 52, is the first founding family member to take the helm at Japan’s No. 1 automaker in 14 years. He promised a reaffirmation of the company’s core principles, such as valuing ideas developed from the ranks of employees.
Canada’s top bank sets record rates
Canada’s central bank cut its key interest rate by one-half point to one percent, the lowest level ever. The central bank said Tuesday that Canada and much of the world is in recession and that stabilizing global financial markets is necessary for recovery. The latest cut means the bank has cut 3.5 percentage points off the overnight lending rate since it began the current easing policy 13 months ago to stimulate the economy.
T-bill rates rise in Monday auction
The Treasury Department auctioned three-month bills at a discount rate of 0.14 percent, up from 0.12 percent last week. Six-month bills were auctioned at a discount rate of 0.325 percent, up from 0.29 percent. For a $10,000 bill, the three-month price was $9,996.46 while a six-month bill sold for $9,983.82. That would equal an annualized rate of 0.142 percent for the three-month bills and 0.195 percent for the six-month bills. The Federal Reserve’s weekly report on the average rate for one-year Treasury bills was delayed because most federal offices were closed for the inauguration of President Barack Obama.
From Herald news services
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