BHP Billiton reaches earnings nadir 16 Aug 2016 A ray of light is appearing for the mining giant. Weak global demand and a Brazilian dam disaster were partly to blame for a record $6.4 bln full-year net loss but the worst has passed. As long as prices stabilise, cost-cutting will allow BHP to return more cash to shareholders.
Gas mega-merger looks short on solids 16 Aug 2016 A potential $63 bln merger of Praxair with Germany’s Linde could cut the industrial gas market from four big players to three, and create more value than the earlier union of Air Liquide and Airgas. Yet despite strategic appeal, it’s hard to see a deal making financial sense.
Rio Tinto’s best is not yet good enough 3 Aug 2016 The Anglo-Australian miner has slashed debt but can't take its eye off the ball after posting its worst earnings in 12 years. No wonder Rio is trading at a discount to peers. New boss Jean-Sebastien Jacques is paying out dividends, but has his work cut out to win over investors.
Water woes are a drain on Make in India 26 Jul 2016 India has long undervalued one of its most precious resources. Chronic mismanagement of water in the country is already a strain on factories. Now the worry is that it will hold back Prime Minister Narendra Modi’s big plan to create jobs and turn India into a manufacturing hub.
Indian tycoon’s sweetened Cairn bid is still sour 25 Jul 2016 Anil Agarwal's mining group Vedanta has upped its offer to buy out the minorities of its cash-rich Indian subsidiary. The 9 percent premium looks far from compelling. The fate of the $2.4 bln bid rests with Cairn India's two largest outside investors.
Exxon’s New Guinea sojourn stirs oil M&A waters 19 Jul 2016 The U.S. oil giant's $2.3 bln offer for Papua-focused gas explorer InterOil topped an earlier approach from rival energy group Oil Search. Though it's Exxon's biggest swoop since crude prices crashed, it looks more like opportunism than a catalyst for an impending deal wave.
Review: To have and have not, Brazil-style 1 Jul 2016 In "Brazillionaires," Alex Cuadros explores Latin America's biggest economy through its wealthiest citizens, whose fortunes he tracked as a reporter. It's a tale of boom, bust and back-scratching among moguls and politicos that sheds a telling light on the nation's current woes.
In-market M&A goes off-script in Japan 29 Jun 2016 Combining with a local peer shouldn't be too hard. Not so with Japanese refiners Idemitsu and Showa. Idemitsu's top backer thinks the group, which is close to Iran, should avoid Saudi-backed Showa. The concerns look overblown – and waiting a year to air them is downright bizarre.
Bankers can learn from miners about culture change 15 Jun 2016 Rio Tinto, BHP and their peers have spent years improving their safety records. The finance industry can learn a thing or two from the way that miners have tried to clean up their act. Not least is the ambition to attain higher standards than absolutely required by the law.
Giving watchdog algorithm keys is slippery slope 14 Jun 2016 The CFTC wants to inspect source codes of trading firms without a subpoena. The U.S. agency says it’s needed for records retention. Unclear is whether the regulator can safeguard such intellectual property, and it opens the door for other officials to request similar access.
Noble’s cash call will buy it one year 3 Jun 2016 The commodity trader is tapping shareholders for $500 mln days after its CEO resigned. The rights issue and other disposals should cover $2 bln of debt due next year. But Noble is still asking investors to believe its core business will be able to consistently generate cash.
Noble CEO exit signals reduced ambitions 30 May 2016 Yusuf Alireza is leaving the embattled commodity trader after four years in charge. Though Noble has avoided an immediate liquidity crisis, investors still question its long-term viability. Flogging its U.S. energy arm will raise cash at the expense of further shrinkage.
Opening Iran means uncloaking Revolutionary Guard 18 May 2016 Post-sanctions, Tehran offers huge potential for foreign investment. But the military guardians of the Islamic revolution are deeply entwined in business life. If Iran’s President Hassan Rouhani wants to open things up, the Guards’ influence needs to become much less opaque.
China could pick up more bargains in commodities 10 May 2016 The People’s Republic is warming up to the sector as global miners race to cut debt. The latest deal sees China Molybdenum snap up Freeport’s Congo copper project for $2.7 bln. At the current pace, China’s hunger for overseas mining assets could return close to peak levels.
Rio Tinto goes Genghis on the copper market 6 May 2016 By expanding its $5.3 bln Oyu Tolgoi mine in Mongolia, the miner hopes to ride an upswing in demand. Under-investment in new mines and declining quality could see the market in deficit by 2020. But there’s a risk that copper goes the way of iron ore, into a damaging supply war.
Farcical oil deal prompts George Costanza defense 5 May 2016 Like the character in sitcom “Seinfeld,” Energy Transfer hopes to shake up a sour relationship: the $21 bln takeover of pipeline rival Williams. ETE aims to pay less cash, seeming to force the issue by making itself as unattractive as possible. The stakes are no laughing matter.
Shell, after eating for two, starts strict diet 4 May 2016 After buying rival BG, Shell has cut costs. But it will need the $30 bln of planned asset sales to help cover gaps in cashflow over the next three years. It looks like a tall order, though the rising oil price will help. Shell probably has scope to reduce spending further.
U.S. Steel’s China hacking gripe clever but risky 29 Apr 2016 The giant producer claims cyber thefts breach trade laws and has asked a federal commission to block offending firms’ imports. It’s a novel way to fight a thorny problem but one unlikely to attract imitators. The Middle Kingdom may be too lucrative a market to tempt retaliation.
Chancellor: Oil prices don’t need a Doha to rise 22 Apr 2016 An agreement among feuding OPEC members to cut production may still be elusive. But the Saudis and other oil-producing nations are in no position to ramp up. As U.S. oil output is set to fall sharply this year, the price of energy is likely to keep heading upwards.
Anglo American’s pay mess is self-inflicted wound 22 Apr 2016 Over two-fifths of the mining group’s investors rejected Mark Cutifani’s pay in a non-binding vote. Anglo should be in investors’ good books: its CEO’s turnaround is working. But by offering a pay package that hedged the risk of it failing, the group shot itself in the foot.