Commodities

Glasenberg successor will run a different Glencore

13 December 2018

The commodities giant’s combative boss says he will retire in 3 to 5 years. It’s unclear who will replace him, even after a recent reshuffle. With a U.S. subpoena and other woes weighing heavily on the stock, Ivan Glasenberg may yet be tempted to consider a much bolder overhaul.

Miners’ digging rush is a chance to show restraint

10 December 2018

Exploration, which stalled as prices crumbled after 2011, is back. Speculation over Rio Tinto’s drilling in Australia’s Great Sandy Desert, for example, has sent rivals on a copper-hunting frenzy. With deals scarce, such moves make sense, so long as the diggers stay disciplined.

China moves a touch closer to EV driving seat

5 December 2018

Beijing has signed a new cobalt deal with Congo. The U.S. should already be antsy that its main strategic rival controls a third of what is a key component in electric vehicle batteries. Yet a scenario whereby China also acquires market leader Glencore’s share isn’t impossible.

Aussie grain bid offers shelter in climate storm

3 December 2018

A fund run by infrastructure veterans has bid $1.8 bln for GrainCorp, once courted by U.S. giant ADM. The 43 pct premium isn’t too generous given drought-hit shares. But extreme weather is here to stay; that’s a powerful argument for long-term, private ownership.

Saudi can pick a path through its OPEC minefield

27 November 2018

Riyadh must somehow please oil-producing peers who want to bolster prices and a U.S. president who wants the opposite. Crude costs will rise when Donald Trump’s temporary Iranian oil waivers expire. Saudi can appease both sides by making equally temporary reductions in output.

Trump’s Saudi amorality can make Gulf great again

26 November 2018

Support for Mohammed bin Salman after the murder of Jamal Khashoggi has skewered U.S. claims to moral leadership. Yet the U.S. president now has huge leverage to force Saudi’s crown prince to reverse course on Qatar, Yemen and other blunders. He would be a fool not to use it.

Tanzania’s nuts policy is so bad it’s good

22 November 2018

President John Magufuli is shelling out $320 mln to buy all its cashew crop at a hefty premium to help farmers. The government faces a big loss. Failure would at least expose the folly of ham-fisted state intervention, at odds with Africa’s gradual liberalisation.

Mozambique removes only part of tuna bond whiff

16 November 2018

The war-scarred African nation wants to restructure its defaulted obligation by linking repayments to future gas sales, giving bondholders extra security. But developing $50 bln of projects in such an exotic locale is unlikely to avoid snags. Delays could mess up creditors’ sums.

Oil forecasting goes from tough to pointless

14 November 2018

In recent months crude has hit $86 a barrel, fallen to $65, and is now rising again. Oil prices drive other markets, but predicting them can be a waste of time. Changing demand outlooks, Saudi turmoil and Trump are only the most volatile of a series of uncertainties.

Thyssenkrupp’s tarnished revamp is still needed

9 November 2018

Shares in the German industrial group plunged 10 pct after its latest profit warning. The bad news has further rattled investors already lukewarm about its planned breakup. Still, hiccups from unpicking an unwieldy conglomerate don’t make the strategy any less valid.

South African boring is once again interesting

2 November 2018

New rules for the Rainbow Nation’s struggling mining industry strike a decent balance. Making investors bear less of apartheid’s social legacy will stop the sector’s decline. Taking the affirmative action shackles off explorers might even create some much-needed growth.

BHP atones for past M&A sins

1 November 2018

The mining titan is returning all $10.4 bln from its U.S. shale sale in a dividend and buyback. A nudge from pushy investor Elliott and deal discipline led to a better use of capital than in the last cycle. Boss Andrew Mackenzie has set a higher bar for BHP’s financial balance.

Trade and pig diseases infect China’s pork giant

31 October 2018

WH Group, $11 bln owner of U.S.-based Smithfield, is fighting a losing battle on two fronts. Deadly swine fever is sweeping China, while tariffs hammer its American market. Quarterly earnings fell by almost a third from a year earlier. It will get worse before it gets better.

China’s oil windfall covers up hints of gas pain

31 October 2018

PetroChina has reported a more than fourfold rise in quarterly earnings, a bumper profit fuelled by higher crude prices. But the $210 bln state producer also took a heavy hit on gas imports this year. Those losses may widen as China cranks up a shift away from coal at all costs.

China’s Guinea snub sends bearish iron ore signal

29 October 2018

Chinalco has stepped back from a 2016 deal to take control of the $23 bln-plus Simandou project from partner Rio Tinto. That’s a headache for the mining giant and a blow to West Africa's ambitions. It suggests Beijing sees sustained cooling in demand for the steel ingredient.

Khashoggi showcases moral trilemma of big business

26 October 2018

Total sent its CEO to Riyadh for Saudi’s flagship conference despite its role in a Saudi journalist’s death. HSBC fielded a big team, too. Firms strive to be larger, profitable and ethical, but often only achieve the first two. Profit’s lead over ethics appears to be narrowing.

Metal tycoons test India’s new era of governance

26 October 2018

The Ruia family’s $7.4 bln offer to pull Essar Steel from bankruptcy is a brazen attempt to stop ArcelorMittal's winning bid. Creditors will do better with the former owners, but it makes a mockery of a young insolvency code and undermines the fight against errant moguls.

China aims rare-earth bazooka at trade rivals

25 October 2018

Beijing is limiting output of tough-to-mine minerals like cerium and neodymium, starving foreign buyers of key ingredients used in electronics and weapons. It's a drastic escalation that will punish profit margins, and yet an overdue rush to develop new supply will come too late.

Succession cloud is one issue Glencore can clarify

22 October 2018

Boss Ivan Glasenberg may have talked to investors of retiring in up to five years. The company's driving force is a youthful 61. But the group has had a torrid 2018, including a U.S. subpoena, and lost some $16 bln in value. A clearer view of the next generation would help.

Cooled coal IPO singes commodities exuberance

22 October 2018

Private equity-backed Coronado shrunk a $1 bln share sale Down Under to just $550 mln and priced it at the bottom of the range. A rosy comparison to Rio Tinto’s recent asset sales came up short. And it is the latest sign of shakier prospects for steel and China demand.