Glencore faces fight to land $5.5 bln Viterra deal 12 Mar 2012 Buying Canada’s biggest grain handler would round out the commodity trader’s growing agricultural portfolio. The assets are attractive and the timing is right. But rival bidders, a lack of obvious synergies and Canada’s penchant for resource nationalism may present obstacles.
No winners in Vale’s tax clash with Brasilia 9 Mar 2012 The Brazilian mining giant is embroiled in an escalating legal row over back taxes. The new CEO is looking more like his own man than a state functionary. But investors are right to focus more on Brasilia’s growing temptation to extract that pound of flesh.
Indonesia’s mining asset-grab overplays its hand 8 Mar 2012 A decree forcing foreign miners to cut their stakes in projects below 50 percent shows worrying disregard for overseas capital. Indonesia’s finances are robust, but ongoing fuel supply issues, caused by a lack of energy investment, show it can’t afford to play too rough.
Glencore shouldn’t overplay its hand with Xstrata 5 Mar 2012 The commodity trader’s CEO, Ivan Glasenberg, has said the deal’s terms are fair and questioned why he should pay a higher premium for miner Xstrata. It’s easy to see why he is acting like he holds all the cards. But in reality, his poker face isn’t that convincing.
Vedanta restructuring may need a rejig 28 Feb 2012 The India-focused FTSE 100 mining group is simplifying itself. There are sound commercial gains to be made in the process, but doubts linger about whether the assets are being transferred at equitable values. To get the deal done, Indian investors may need a bit more of the pie.
Gold’s bull run is tired but maybe not over 23 Feb 2012 The yellow metal’s price is up recently, but remains 8 percent below the September peak. A decade-long bull run is looking weary – ultra-high prices are depressing jewellery demand. But investment demand will stay strong as long as finance looks abnormal. Gold could go higher.
Why the league-table bonanza at Glencore-Xstrata? 14 Feb 2012 Seven banks is a pretty full roster for a long-awaited, friendly, all-share merger. Fortunately there are still some other banks out there that can write unconflicted research or advise interlopers. But if more advisers means a bigger bill for fees, investors won’t be chuffed.
Glencore-Xstrata gatecrashers in short supply 10 Feb 2012 A merger backlash could put Xstrata in play. Vale tried to buy it in 2008. And Xstrata’s copper business could tempt Rio or BHP to launch a breakup bid. But such moves look unlikely. Xstrata investors shouldn’t expect outside help in pushing Glencore to sweeten its offer.
BHP Billiton dip exposes super-cycle challenge 8 Feb 2012 Figures from the world’s biggest miner suggest the commodity super-cycle is entering a more subdued phase. Rising labour costs and less intense demand for raw materials in China, along with slow global growth, mean the sector’s days of super-normal profitability may be numbered.
Glenstrata deal needs rejig 7 Feb 2012 Some Xstrata investors say they will vote no to the mining merger with Glencore. But a deal may still be possible if both sides can agree a proper board and a sweeter premium for Xstrata. There’s a big incentive to talk: given the mess, neither can go back to the status quo.
Don’t bet against Glenstrata antitrust roadblock 7 Feb 2012 Many customers see Glencore and Xstrata as one, even before their all-share merger. But that won’t stop regulators everywhere poking into Glencore’s secretive business. Market share in copper and zinc isn’t the only concern: bigger miners exert pressure on governments too.
Xstrata holders right to fret over Mick’s rewards 6 Feb 2012 CEO Mick Davis’s contract promises millions from any takeover, even if he doesn’t hold out for the best price. True, Davis’s existing shares help align his interests with outside shareholders’. But investors should still examine any Glencore deal closely.
Stock up on gold, tinned food and shotgun shells 30 Dec 2011 OK, there’s no need to be too melodramatic. But hard times bolster the case for hard assets. When protesters fill the streets and the only cure for debt crises is printing money, it’s tempting to head for the hills. Assets offering true security fit in a suitcase.
Don’t shoot the emissions-market messenger 21 Dec 2011 The EU is under pressure to prop up its carbon trading market because falling prices have killed the incentive to invest in clean energy. But the market is accurately weighing supply and demand. Any intervention for public-policy goals must be within clearly prescribed limits.
Even gold fails as markets head down from summit 13 Dec 2011 Stocks and the euro have been hit. Even gold has provided no safe haven. Investors are approaching the year-end decidedly risk averse, with concerns about near-term euro zone financing uppermost. With so many assets vulnerable, the dollar and cash are among the few refuges.
Glencore resilience brings Xstrata deal closer 11 Oct 2011 Mining M&A’s clearest fantasy deal has inched closer to reality. A Glencore takeover of its $43 bln mining affiliate looks easier after the commodity trader’s shares held up better in the recent rout. But Xstrata investors are unlikely to roll over without a substantial premium.
Cash beats commodities as markets panic 26 Sep 2011 Supply and demand don’t matter when investors dive for cover. Commodities were soaring on prospects for Asian growth, a sinking dollar and inflation. But fear that Europe’s crisis will compel investors to liquidate means gold, silver, oil and copper are losing their lustre.
Glencore share price recovery depends on M&A 25 Aug 2011 The commodity trader’s performance sagged slightly between Q1 and Q2. The business is coasting along, and the latest numbers were free of nasty surprises. But without an opportunistic acquisition, a recovery in the shares - still 25 pct below their issue price - will be a slog.
Shell’s big bets are paying off 28 Jul 2011 The AngloDutch oil major is pushing the boundaries. It is turning gas into diesel fuel and building a floating LNG vessel several times the weight of the Titanic. Technology gives Shell an advantage despite the challenge of making the economics work. So far, so good.
China oil barter system won’t solve Iran’s woes 26 Jul 2011 It isn't unusual for countries to trade goods in exchange for oil. But even if China sends machinery instead of money to circumvent U.S. sanctions, and with supply to India cut for similar reasons, Iran still needs hard currency to insulate itself from economic problems.