Mining

Agarwal’s Anglo carve-up has a new stumbling block

21 February 2019

The Indian tycoon’s rent of a fifth of the mining group’s shares implies he might want to lobby for a breakup. To do so he’ll need to get Anglo American’s next biggest investor, South Africa’s state pension fund, on side. That’s beginning to look less and less likely.

Glencore treads fine line between green and black

20 February 2019

CEO Ivan Glasenberg will keep coal output at current levels. That’s surprising for a miner which makes a third of group EBITDA from the pollutant. But given the company’s various other hard-to-solve regulatory headaches, bringing ESG investors onside is a logical proactive step.

BHP sets judicious pace for big diggers

19 February 2019

Two fires and a runaway train smudged first-half profit at the world's largest miner. BHP cut debt to below its target and said it is eyeing $9 bln in free cash in the year to June, at current commodity prices. But CEO Andrew Mackenzie kept the tone cautious and spending flat.

Miners’ Congo optimism is post-Kabila sugar-rush

13 February 2019

Joseph Kabila’s exit as the African giant’s leader is generating some positive vibes. Reminders of Congo’s vast mineral potential are light relief for shareholders beaten down by government shenanigans. But they won’t help convince Kinshasa to treat the industry any better.

Anil Agarwal’s Vedanta antics are self-defeating

1 February 2019

A unit of the Indian tycoon’s mining company is buying some of his personal holding in Anglo American. Minority shareholders wiped off one-fifth of the company’s value. Given any swoop by Agarwal on Anglo may require winning minorities over, it’s an odd move.

Vale’s Brazil dam damage will hurt its peers too

29 January 2019

A second disaster in three years has already cost the mining giant $19 bln in market value. Fines and a management overhaul will likely follow. Fresh scrutiny from stakeholders will hit an industry already grappling with high costs, slow projects and risk-averse shareholders.

Vale disaster threatens Brazil’s deregulation push

28 January 2019

A lethal dam collapse wiped $18 billion off the mining company’s value. It may also derail President Jair Bolsonaro’s plans to bolster business by rolling back environmental and other regulations. Angry Brazilians and skittish lawmakers may want to go in the opposite direction.

Oleg Deripaska’s En+ deal is more sour than sweet

23 January 2019

The settlement that distanced the Russian oligarch from his power company has favourable aspects, the New York Times says. Certain provisions could even limit the financial hit from U.S. sanctions still in place against him. The overall outcome is, however, still pretty painful.

Chaotic election ruling raises Congo split risk

21 January 2019

The African nation’s top court rejected complaints by runner-up Martin Fayulu, who says the Dec. 30 vote result is fraudulent. Unofficial tallies say he is right. His supporters in Congo’s mining belt could now push for a split from Kinshasa – leaving cobalt supply in turmoil.

Size matters less than gold miners think

17 January 2019

Newmont's $10 bln Goldcorp purchase creates a behemoth, and the U.S. miner has talked up options from extra assets, plus steady output and dividends. But its investors are right to be sceptical. Management will have to over-deliver on synergies to secure them a good return.

Miners can close the confidence gap in 2019

16 January 2019

Stock markets point to a rough year for diggers, valuing each dollar of expected cash at a stubbornly hefty discount. Investors are fretting about a Chinese slowdown and don’t trust cashed-up bosses at Rio, BHP and the like to restrain themselves. The reality may be brighter.

Newmont’s $28 bln gold merger is an alloyed good

14 January 2019

The U.S. gold miner is swallowing Canada’s Goldcorp in an all-share deal. Rivals Barrick and Randgold already bulked up in a similar deal, and the 17 pct premium is slim. Yet Newmont is handing over most of the benefits, and even those might be hard to extract.

U.S. Oleg Deripaska deal tougher than it looks

20 December 2018

Washington’s decision to lift sanctions on En+ and allow the Russian oligarch to keep a 45 pct stake sounds lenient. Yet it looks difficult for Deripaska to sell his stake for cash or exercise decisive influence. After a messy beginning, the U.S. raid seems a qualified success.

Rio will turn big miners back into big spenders

20 December 2018

Despite fat cash piles, mining groups have been slow to acquire. With new projects costly and demand high, copper was already a good strategic bet even before trade war jitters caused a price slump in 2018. Expect Rio Tinto to come calling for $15 bln U.S. rival Freeport.

Glasenberg successor will run a different Glencore

13 December 2018

The commodities giant’s combative boss says he will retire in 3 to 5 years. It’s unclear who will replace him, even after a recent reshuffle. With a U.S. subpoena and other woes weighing heavily on the stock, Ivan Glasenberg may yet be tempted to consider a much bolder overhaul.

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.