Commodities

Calpine $5.6 bln buyout puts chips on gas hegemony

18 August 2017

A consortium is taking the heavily indebted electricity company private at a 51 pct premium. It’s a bet natural gas will dominate the nation’s power grid. Problems with other sources justify that for now. Longer term, stagnant electricity prices and usage makes it a big risk.

Glencore’s debt purge creates enviable problems

10 August 2017

Surging commodity prices are helping Chief Executive Ivan Glasenberg to slash debt faster than planned and restore profitability. That gives the mining giant scope to hand more money back to investors or make bigger bets on growing demand for resource-hungry electric vehicles.

Wall Street’s resolve overcomes even Pyongyang

9 August 2017

U.S. investors shrugged off possible Armageddon just as easily as protectionism and D.C. dysfunction. President Trump’s blunt nuclear warning might have been a fresh reason to rush into gold or gunsmiths. Mr. Market, however, rarely foretells geopolitical or economic threats.

Sydney meets Shandong in $2.5 bln share sale

4 August 2017

Yancoal is raising more than 10 times its own market cap to buy Rio Tinto’s coal unit. To get this done, the indebted small-cap had to bring in some unusual underwriters. The result is a novel blend of Australian public-company process and Chinese state capitalism.

Rio Tinto’s new problem: What to do with its cash

2 August 2017

The miner more than doubled earnings in the first half and promised to return $3 bln to shareholders in buybacks and dividends. Higher prices and asset sales helped reduce debt to its lowest level since 2010. After years of deleveraging, spare cash is an unusual dilemma for Rio.

Noble turns to radical medicine

26 July 2017

Banks gave the stricken commodity trader a few months’ reprieve. Now its new boss is selling key energy units, writing down controversial assets and planning $1 bln more in asset sales. There is a long way to go but at least he is tackling Noble’s pressing liquidity problem.

Chinese green car boom fuels lithium rush

17 July 2017

Beijing's policy push toward electric vehicles is driving investor interest in lithium and lithium miners. The price of lithium carbonate has almost trebled since 2015, and acquisitions are underway. Demand for the suddenly strategic commodity could trigger a tussle over supply.

Permian drillers almost impervious to falling oil

12 July 2017

U.S. producer Halcon is selling assets in the Bakken to focus on the Texas region. Growing efficiency and producers’ ability to turn off the spigot quickly if needed keeps investment gushing into the Permian. It will take a bigger bear than falling oil to shake the confidence.

Rio Tinto right to take China’s $2.7 bln and run

27 June 2017

In selling a group of thermal coal mines, the miner weighed up a higher, less certain price from China’s Yancoal, or a lower, more secure bid from Glencore. The former looks better. Selling to China could bring other benefits. The main thing is to get shot of dirty fuel assets.

Glencore misreads Chinese tea leaves in bid battle

21 June 2017

Rio Tinto still wants to sell $2.5 bln of coal assets to China's Yancoal, rather than taking $100 mln more from the Swiss trader. Worries that Beijing would create problems for the gatecrasher probably played a role. A sharply higher offer could persuade Rio to reconsider.

Exchange Podcast: James Ledbetter

20 June 2017

During the 2016 campaign, Donald Trump suggested the United States revisit the gold standard. So did his rivals Ted Cruz, Rand Paul and Ben Carson. Why are Americans so obsessed with the precious metal, both as a store of value and an investment? James Ledbetter swings by Times Square to discuss his new book, "One Nation Under Gold."

Review: Gold’s financial fascination never dies

16 June 2017

Bullion-backed bucks won’t come back. Investments in it don’t yield dividends, either. "One Nation Under Gold" explains why the precious metal nevertheless captivates Americans. The shiny stuff, not unlike the Trump presidency, is a bet against elites and the establishment.

South Africa kicks miners, scores own goal

15 June 2017

Shares in Anglo American and peers fell after the government lifted the minimum threshold for black ownership of resource companies. The new rules are a blow to efforts to rebuild confidence at home and abroad. An economy that is already in recession will share investors' pain.

Mining debt junkies in danger of $100 bln relapse

13 June 2017

Glencore’s return to big dealmaking could signal a renewal of mining groups’ appetite for risk. The likes of BHP, Anglo American and Rio Tinto have also cut back their borrowings since the last boom. Now with lots of room to gear up again, they risk falling back into bad habits.

Glencore looks well-placed to snatch Rio coal unit

12 June 2017

The trading giant has shoved aside Yancoal's slow-moving purchase of Rio Tinto assets with a $2.6 bln cash bid - $100 mln over Yancoal's still not-quite-financed offer. Glencore is betting Yancoal has thin political support and weak financial firepower. That seems shrewd.

Glencore food binge could leave investors hungry

24 May 2017

An offer to merge with U.S. agricultural trader Bunge has strategic vision but lacks obvious financial returns. A full acquisition could cost the Swiss group’s food unit at least $15.3 billion, and that could affect Glencore’s ability to pay dividends later.

Jump at Bunge shows Glencore has its M&A mojo back

24 May 2017

The commodity giant's agricultural arm approached the $11 bln U.S. grain trader about a friendly deal. A takeover may not be the goal, and Bunge is cool on a tie-up. But after some tough balance-sheet repair, Ivan Glasenberg’s trading powerhouse is clearly back on the offensive.

Elliott’s hard work is just starting at Arconic

22 May 2017

The activist fund’s deal ending its bitter fight with the car- and plane-parts maker strengthens its grip on the board. It also puts one of its picks into the ring to be CEO. That shifts Elliott’s role from attacking poor results and governance to showing it can improve them.

BHP should take Elliott’s activism as a compliment

16 May 2017

The fund has renewed its call for the miner to break up. BHP isn’t the only one with portfolio clash – rivals Rio Tinto, Anglo American and Glencore all have bits that don’t fit. But BHP’s oil business is well suited to a spinoff. Resistance makes it look more desirable.

Noble Group founder bows out on a low

11 May 2017

Chairman Richard Elman is stepping down as the embattled commodity trader confirmed a quarterly net loss of $130 mln. An earlier profit warning had already slashed 32 pct from its shares. Despite a rights issue and a slew of other initiatives, investor confidence is shot to bits.