It sounded like you wanted to put the automated blog on your production hosting, not on your website. You can setup industry news to be published on your site, but I really don't see the benefits of having a fully automated RSS to posts blog, except for traffic. What value will your visitors get from it?
Why not just either comment on the news (unique comments), write articles (
unique and useful articles) or create full-blown pieces of content (very useful, linkable stuff).
Anyway, if you don't link from your main site to the automated blog, you won't be harmed. If you do link to your duplicate content aggregator, you probably wont get hurt - but that's not clear to me, whether linking to duplicate content hurts or not.