Mining

BHP boss makes himself tougher act to follow

20 August 2019

The miner reported a record $3.9 bln final dividend alongside its highest earnings in five years. Even as CEO Andrew Mackenzie conserves cash ahead of economic clouds and the end of his tenure, he has fulfilled shareholder return pledges. Any successor will face harder choices.

Iron ore feels the pinch of Beijing’s restraint

15 August 2019

Prices of the steel ingredient have cooled, as a supply squeeze fades but a hoped-for Chinese boost to demand remains elusive. Mainland growth is lacklustre, but construction has yet to rev up in response. Stimulus this time may not mean more bridges: bad news for Rio and peers.

Fickle nickel sends out false value signal

9 August 2019

The metal is at its priciest since 2018 having surged 50% this year, more than other key battery materials. The spike, though, rests on misplaced optimism on Chinese growth, and speculation that an Indonesian ban could curtail supply. Producers like Vale can hold off celebrating.

Glencore unearths new grounds for cheap valuation

7 August 2019

The Swiss miner and trader had a bad six months, missing out on rising prices for iron ore while hit by lower ones for coal. Now it is mothballing its prized Congolese Mutanda mine. Chief Executive Ivan Glasenberg has to hope tighter supply buoys the right commodity markets.

Glencore coal split could scratch multiple itches

2 August 2019

The $42 bln giant is the largest thermal coal exporter, at a time when miners are under growing pressure to clean up. Splitting out that business would help, and can also lift a depressed valuation. It might even make sense for boss Ivan Glasenberg to lead the carve-out himself.

Rio’s shiny profit masks a less lustrous reality

1 August 2019

The miner reported solid earnings, seasoned with a $1 bln special dividend. The detail is a bit more tarnished: iron ore operations are feeling the strain from years of cuts, and a Mongolian mine has underwhelmed. Investors love cash, but Rio also needs to invest in what it has.

Indian mogul’s ode to Anglo ends on duff note

26 July 2019

Anil Agarwal is dumping his roughly 20% stake in miner Anglo American. The complex holding structure, dubbed “poems” by creator JPMorgan, meant he only partly profited as the target’s shares soared. The bigger prize, meshing it with his Vedanta empire, also proved elusive.

Barrick CEO lets hard image slip for sensible deal

19 July 2019

Mark Bristow will, after all, pay up to buy out 36% of Acacia Mining in a transaction worth over 50% more than the gold miner’s offer in May. It’s a small victory for minority owners, whose company is under fire from Tanzania’s government. But for everyone, it beats a standoff.

Miner exits shift coal spotlight to Anglo American

16 July 2019

BHP is the latest heavyweight to consider a sale of thermal coal assets. That's sensible given weak prices, pressure from investors and a business that is barely material. Anglo's bigger exposure means a tougher choice - with few buyers, there’s a case for staying the course.

Rio sounds copper warning from Mongolian steppe

16 July 2019

The miner's flagship Oyu Tolgoi expansion will be up to 30 months late, and could cost as much as a third more than planned. It’s a fresh blow to a project that has been bruised by local politics. The latest snag is a reminder of why the red metal has become so hard to dig up.

Congo deaths are a new stick to beat Glencore

27 June 2019

The Swiss commodity giant’s shares fell 5% after an accident killed dozens of illegal miners at one of its DRC pits. It’s difficult for resource groups to stop these incursions. But Kinshasa’s record of miner shakedowns implies it might still find a way to penalise Glencore.

Potash makes better sense for BHP than shale

20 June 2019

The miner is weighing whether to press ahead with a $20 bln Canadian project, its most significant investment in years. BHP shareholders, scarred from past blunders, are understandably wary. There may be a case, though, that potash will be more like iron ore than fracked oil.

Acacia and Barrick pay price for Newmont escapade

19 June 2019

Barrick CEO Mark Bristow won’t sweeten his offer to minority investors of the Tanzanian gold miner. A small raise could defuse the damaging stalemate. But after an expensive and failed tilt at Newmont, Bristow is under pressure to be seen to defend his shareholders’ interests.

Thorny Acacia pricks Barrick boss’s Africa bubble

11 June 2019

The bullion miner’s minority shareholders look set to spurn a 226 mln pound bid from its Canadian parent, prolonging a tax row with Tanzania. That’s a blow for CEO Mark Bristow’s status as an African gold guru. His hardball tactics are also unlikely to impress other partners.

Rare-earth gun is best left in Beijing’s holster

29 May 2019

China, which dominates supply of minerals like neodymium, has hinted it might squeeze exports to the United States. In the past, similar embargos caused buyers to find substitutes; bans are hard to enforce, too. The threat suggests retaliatory options are limited.

Barrick’s lowball Acacia offer is easy to refuse

22 May 2019

The Canadian bullion producer offered to buy out minority shareholders in the Tanzanian miner at an 8% discount. That gives an out from an $180 bln tax dispute with the East African country. It’s a bitter pill, but looming arbitration gives shareholders reason not to swallow it.

Vedanta Zambia mess tarnishes Anglo breakup pitch

22 May 2019

President Edgar Lungu wants to nationalise the Indian firm’s Konkola copper mines. The hit looks manageable for owner Anil Agarwal. But falling out with a government is an eyesore, particularly if he wants investors to back a potential carve-up of Anglo American in South Africa.

British Steel rescue loan is worst of bad options

21 May 2019

The UK’s second-largest steel producer may fail without state credit. Politicians can nationalise the company if they want to save thousands of jobs in a strategic sector. Or they could let the group go bust. The worst outcome is a short-term fix that bails out private owners.

Miners have a shot at earning green halo

16 May 2019

Vale’s dam disaster was a reminder of the industry’s social and environmental pitfalls. At the same time, the likes of BHP and Glencore can tout their ability to supply future low-carbon economies. ESG activists punished coal, but they’re in position to reward diggers, too.

Thyssenkrupp shoved into a panicky Plan B

10 May 2019

The German conglomerate is binning a split after weak operations hit its shares, Reuters reports. Spinning off its elevator business instead would help, especially if the EU blocks a merger of its steel arm. But Thyssenkrupp would still need to show it can cut bloated costs.