U.S. Oleg Deripaska deal tougher than it looks 20 Dec 2018 Washington’s decision to lift sanctions on En+ and allow the Russian oligarch to keep a 45 pct stake sounds lenient. Yet it looks difficult for Deripaska to sell his stake for cash or exercise decisive influence. After a messy beginning, the U.S. raid seems a qualified success.
Rio will turn big miners back into big spenders 20 Dec 2018 Despite fat cash piles, mining groups have been slow to acquire. With new projects costly and demand high, copper was already a good strategic bet even before trade war jitters caused a price slump in 2018. Expect Rio Tinto to come calling for $15 bln U.S. rival Freeport.
Glasenberg successor will run a different Glencore 13 Dec 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 Dec 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 Dec 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 Dec 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 Nov 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 Nov 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 Nov 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 Nov 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 Nov 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 Nov 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 Nov 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 Nov 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 Oct 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 Oct 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 Oct 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 Oct 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 Oct 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 Oct 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.