Cobalt tax grab will send carmakers on a diversion 12 Jan 2018 The Democratic Republic of Congo, supplier of two-thirds of the world's cobalt, aims to more than double royalty charges. That's bad news for electric cars: the metal is a key battery ingredient. The move could backfire, however, by accelerating exploration of alternatives.
China is stuck in a petroleum Catch-22 11 Jan 2018 A yuan crude futures contract could finally launch in Shanghai early this year, as the world’s largest importer tries to shake up a market dominated by London and New York. A new benchmark is within reach, but clear-cut success will require the unthinkable: embracing the dollar.
Indian tycoon has golden opportunity in aluminium 10 Jan 2018 A reported $2.5 bln bid from Hindalco for U.S. aluminium producer Aleris would mark a shift in focus to growth for Kumar Mangalam Birla. The headline price is punchy. But surging demand for electric vehicles and more fuel-efficient petrol cars should be great news for the metal.
Indispensable execs demand higher disclosure 18 Dec 2017 CSX’s turnaround expert Hunter Harrison is dead months after joining the railroad. A rich signing package and $10 bln added to the firm’s market worth showed his importance. If companies and markets think and act as if leaders are irreplaceable, key-man risks must be disclosed.
Chile reinforces Latin American pro-business pivot 18 Dec 2017 Billionaire Sebastian Piñera won the copper-rich nation's presidential election with a stronger showing than expected. That will lend succor to like-minded leaders in Argentina, Brazil and Peru for whom fiscal discipline is proving a long slog and graft allegations a danger.
CSX chief’s illness puts its recovery on crutches 15 Dec 2017 The railroad hired 73-year-old Hunter Harrison in a revival effort earlier this year. Less than a year into his four-year contract, he’s on medical leave. Valuations and big pay packages pinned on aging executives call for an actuarial discount.
South African gold giant throws Lonmin a lifeline 14 Dec 2017 Gold miner Sibanye-Stillwater is buying the troubled platinum specialist for shares worth 246 mln pounds. The offer is far from generous compared with available cost savings. But Lonmin’s financial woes and inability to raise equity make a share of a larger group attractive.
Restrained Glencore M&A sets a reassuring tone 12 Dec 2017 The $70 bln commodities group sold assets and made a modest $3.4 bln of purchases in 2017. Partnerships are in vogue. Add in a portfolio geared – partly by accident – to electric vehicles, and it supports a fairly shiny valuation. Now Glencore needs to focus on meeting targets.
China’s aspiring Glencore will drill deep 7 Dec 2017 Beijing wants a seat at the oil trading table. State firms like Chinaoil are no lightweights, but private CEFC could become the first independent player to challenge the likes of Vitol. Its supply deals, political ties and financial backing make it a rival to contend with.
U.S. coal country’s best hope is gas, not coal 6 Dec 2017 The EIA says natural gas output from shale in the Appalachian region – traditionally America’s coal heartland – far outgrew other areas. Efficiency gains will further cut gas costs. Dirtier miners may lobby for Washington handouts, but the shift is already well under way.
Icahn knows a playbook to avoid with SandRidge 4 Dec 2017 As the governance-challenged driller did last week, CVR Energy tried to fend off the activist with a poison pill back in 2012. Icahn ended up bidding for the refiner and still owns 82 pct of it. It’s an experience neither he nor other shareholders will relish repeating.
Rio Tinto plays it safe with compromise chairman 4 Dec 2017 After a nine-month search, the $90 bln miner picked director Simon Thompson over former Xstrata boss Mick Davis to lead the board. His mining, emerging-market and buyout knowhow should prove useful. A fresh push to squeeze out cash is another sign Rio is keeping risks calculated.
Rio Tinto holds valuable card in Jakarta deal 30 Nov 2017 As Freeport-McMoRan thrashes out terms for handing over a majority stake in the Grasberg copper mine to Indonesia, Rio's production arrangement dating back to 1995 gives it an effective veto. The best way to play this ace up its sleeve would be to negotiate a graceful exit.
Rio Tinto distracted by shiny new thing 22 Nov 2017 The mining giant is mulling a stake in $15 bln lithium producer SQM. Rechargeable-battery fever has helped lift the Chilean company's valuation to a tech-like multiple. Deals will return with industry growth, but after past mistakes including Alcan, Rio is looking late again.
Rio Tinto could have high-grade chairman in Davis 14 Nov 2017 Big miners usually prefer statesman-like chairmen to dealmakers. So former Xstrata boss Mick Davis would be an odd choice at Rio, especially at this point in the commodity cycle. But he’s smart, thinks big and would keep headstrong CEO Jean-Sébastien Jacques on his toes.
BP offers window into slippery pipeline valuations 7 Nov 2017 The oil giant recently seized on an uptick in oil prices to list pipeline assets, but its shares have disappointed. One problem is the fact it's so dependent on BP. But given recent issues, investors are also wise to be cautious about pipeline operators' balance sheets.
ABF’s sweet tooth will weigh on valuation 7 Nov 2017 The beets-to-boots seller is doing well in fashion as its Primark stores win market share from rivals. But profit in the sugar business will fall as EU prices dip. The exposure to commodity price swings makes it hard to justify a valuation approaching that of Zara owner Inditex.
Booming metal markets test mettle of memories 2 Nov 2017 The frenzy over electric cars is helping push copper, nickel and cobalt prices to their highest in years. An expected supply squeeze is also a factor. After frolicking in London this week, global miners get a shot to prove they've learned from cycles past and can use cash wisely.
EQT and its critics make up to break up 1 Nov 2017 The gas company and activists are seeing the value of dialogue. After investors opposed a $7 bln plan to buy rival Rice, management has vowed to speed up work on a split. Shareholders now look set to approve the deal – and retain the threat of a proxy war to keep the firm honest.
Glencore’s Hong Kong exit sends message to Aramco 31 Oct 2017 The secondary listing touted as a gateway to Chinese investors during the miner's 2011 IPO never lived up to the hype. The same goes for Coach and others, who could be forgiven for following Glencore out. It's also a good sign the Saudi oil titan can cross Hong Kong off its list.