Mining

Miners’ digging rush is a chance to show restraint

10 December 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.

Glencore offers glimpse of life after Glasenberg

3 December 2018

The commodities group shuffled its upper ranks in the most significant management overhaul in years. The departure of copper kingpin Telis Mistakidis and promotion of others is a first step towards reshaping the group to cope with the eventual departure of boss Ivan Glasenberg.

Congo vote has only bad outcomes for mining giants

28 November 2018

Joseph Kabila's chosen successor is set to win a presidential election due next month. He will remain in the wings, though. For Glencore and others, that offers little relief after a crippling 2018. Worse, it may mean competing power centres that catch miners in the crossfire.

South African boring is once again interesting

2 November 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 November 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.

China aims rare-earth bazooka at trade rivals

25 October 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.

Succession cloud is one issue Glencore can clarify

22 October 2018

Boss Ivan Glasenberg may have talked to investors of retiring in up to five years. The company's driving force is a youthful 61. But the group has had a torrid 2018, including a U.S. subpoena, and lost some $16 bln in value. A clearer view of the next generation would help.

Shale gas industry hopefuls face rock-hard barrier

5 October 2018

Fracking is about to make its debut in the UK. The practice of extracting gas from shale rock is hailed as likely to put the country on the road to fuel self-reliance. But the industry faces many obstacles, and investors should be sceptical of the scope for gushing returns.

Eritrea’s potash potential justifies the risk

2 October 2018

Miner Danakali is looking to add a big chunk to global potash production via a $322 million mine in the African state. Ongoing demand for fertiliser and a surprise Ethiopian peace deal underscore its interest. Investors should apply an exotic risk discount though.

African miner deals deserve state-fleece discount

1 October 2018

Democratic Republic of Congo claims Barrick’s $6.5 bln Randgold deal means it owes the government money. Two years ago, Kinshasa extracted $100 mln when Freeport sold out. Investors should be discounting their synergy estimates to reflect the risk of something similar.

Barrick and Randgold wisely explore M&A riches

24 September 2018

The $12 bln Canadian miner led by former Goldman banker John Thornton is set to unite with its African-focused rival. A deal this big would shake up a sector long cowed by past mistakes. Given weaker prices, falling output and a geographic fit between the two, the idea has logic.

China flaunts firepower in Canadian copper deal

6 September 2018

Zijin Mining agreed to buy Nevsun for $1.4 bln, trumping hostile suitor Lundin. A cash bid at a 57 pct premium mostly to bet on a project in Serbia speaks to Beijing's relentless appetite for important metals, but also to scarce supply. Pockets of outbound M&A exuberance persist.

Cautious miners leave room for new swashbucklers

17 August 2018

Heavyweights like BHP have retreated from promising projects in tough spots. Even daring Glencore is fretting about Congo. The result is a long list of untapped resources and few buyers outside China. An intrepid fresh player could step in - if it can access private capital.

Antofagasta shows markets’ low bar to trade panic

14 August 2018

Shares in the London-listed Chilean copper miner slumped after it said U.S.-China trade tensions may hit demand for the metal. Antofagasta had a weak first half, but its guidance is unchanged. Macro jitters mean investors are unwilling to give companies the benefit of the doubt.

Glencore risks writ large in balance sheet caution

8 August 2018

The $60 bln commodities giant only narrowly missed first-half EBITDA forecasts, despite a slew of Congo and U.S. subpoena-related woes. Given its swashbuckling image, investors might have expected more of a splash. The fact they got deleveraging instead flags the group’s concern.

Viewsroom: Trump’s Supreme Court pick

12 July 2018

The U.S. president has chosen a friend of big business in Brett Kavanaugh. But he faces bigger questions from Senate democrats about executive power. Plus: Commodity giant Glencore faces mounting risks in Washington, and what’s behind the Chinese yuan’s downward slide.

U.S. salvo at Glencore has unintended consequences

12 July 2018

A request for details on anti-corruption practices wiped more than $6 bln off the commodities giant's value in a week, raising questions over its future. Yet action is not without a sting for Washington too - if it leaves China even more dominant in resource-rich trouble spots.

Glencore’s investor sunshine aided by U.S. cloud

5 July 2018

A $1 bln buyback will please investors wanting to see the commodities giant’s stronger balance sheet reflected in cash goodies. Yet Glencore is doing it as U.S. authorities demand details on anti-corruption compliance. Its usual gung-ho dealmaking may need to take a back seat.

Agarwal’s Anglo American carve-up looks a stretch

4 July 2018

The Indian billionaire is mulling a merger of his Vedanta empire with the global miner’s South African arm, Mint reports. The valuation case for a breakup is less compelling than it was. If Agarwal acts, it looks more logical to target the miner’s non-South African assets.

Mongolian coal IPO may keep wandering

22 June 2018

The Central Asian nation revived plans to list its prize mine, seven years after it tried at a $15 bln valuation. Coal prices have rebounded from 2015 lows and Chinese demand is strong. With just one big customer and years of false starts, though, investors will need convincing.