Rio Tinto right to take China’s $2.7 bln and run 27 Jun 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 Jun 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 Jun 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 Jun 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 Jun 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 Jun 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 Jun 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.
OPEC’s oil price conundrum requires new bargain 9 May 2017 The cartel’s decision to restrict output has failed to revive prices. Extending the current deal – as Saudi Arabia’s oil minister has hinted – is not guaranteed to drain stockpiles. Making deeper cuts at the expense of market share would do the trick, but could be hard to agree.
BHP’s oil jewel has value even without breakup 12 Apr 2017 The mining giant is under activist pressure to spin off its petroleum business. That would deliver little value for shareholders, a sum-of-the-parts valuation suggests. BHP chief Andrew Mackenzie could do worse, though, than show he is open to a bid at a healthy premium.
BHP Billiton activist’s plan has some merits 10 Apr 2017 Hedge fund Elliott wants the mining giant to clean up its Anglo-Australian structure, buy back shares and split off its oil business, saying shareholders could be roughly 50 pct better off. Even if a full breakup looks a stretch, this may nudge BHP into helpful spring cleaning.
Anglo raid is a complex way to do simple thing 16 Mar 2017 Indian magnate Anil Agarwal appears to be building roughly a 12 percent stake in the mining group. In fact he is renting it, using an exchangeable bond to get access to the votes. The structure is clever, but suggests he is more interested in influence than direct financial gain.
Agarwal weakens Anglo’s breakup defences 16 Mar 2017 Indian billionaire Anil Agarwal’s raid on the UK-listed mining giant may be a prelude to asking for the company to break itself up. Splitting off South African assets might create value. Boss Mark Cutifani may still prefer another course, but the pressure on him is now rising.
Indian tycoon bets house on Africa in Anglo raid 16 Mar 2017 Anil Agarwal's personal 2 bln pound raid on Anglo American reveals a wish to build a global mining giant. There is little overlap with his London-listed Vedanta. But Agarwal has a keen interest in Southern Africa - and a 12 pct stake would give him prime position in any break-up.
Saudi Arabia’s flawed oil plan still the right one 15 Mar 2017 Cuts to production agreed with OPEC aren’t boosting the value of crude as hoped, or reducing global stockpiles. Shale in the U.S. is recovering too, and prices are moving sideways. The holding pattern is painful, but it’s still better than reversing course and letting oil plunge.
Mining giants require more financial medicine 21 Feb 2017 Rising commodity prices and cost-cutting helped BHP Billiton and Anglo American boost earnings and cut debt, but memories of mining's traumatic downturn are still fresh. There's no sign of another investment or borrowing binge, though. Financial convalescence is the priority.