Mining

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.

South32 finds acceptable way to splash the cash

18 June 2018

The BHP spinoff is paying $1.3 bln for the rest of Canadian miner Arizona Mining. The 50 percent premium sounds reminiscent of past mining M&A excess. Yet the deal makes strategic sense, and isn’t too pricey. Besides, South32 needs to deploy its mountain of net cash.

Glencore Congo settlement is a calculated risk

15 June 2018

Paying royalties to Israeli businessman Dan Gertler in euros rather than dollars helps solve the commodities giant’s headache in the African country, while avoiding falling foul of American sanctions. The danger, though, is that the United States changes the goalposts.

Glencore solves least troubling Congo problem

13 June 2018

A debt-for-equity swap at a DRC unit settles a thorny dispute with state miner Gecamines. But the $74 bln resources giant is no nearer to a deal on the country's burdensome new mining code. Heightened uncertainty over upcoming presidential elections only adds to the discomfort.

Chinese deal offers DRC miners a rare sign of hope

12 June 2018

State-backed CITIC has poured $560 mln into Robert Friedland’s Ivanhoe Mines. That is an unusual endorsement of the Democratic Republic of Congo, following a punitive new mining code. The move suggests a compromise is still likely, which would benefit Glencore and Randgold too.

M&A pause is promising for Wesfarmers investors

7 June 2018

The $39 billion Australian conglomerate is exiting British DIY and spinning off supermarkets. Newish boss Rob Scott is wary about future dealmaking. That is encouraging for shareholders: it makes more sense for now to work existing businesses harder and return more cash.

China’s Chile deal highlights a battery dilemma

16 May 2018

Tianqi Lithium is set to buy a stake in the $14.9 bln SQM. That suggests worries about excessive Beijing control over the key battery ingredient’s supply have eased. Still, the People's Republic would raise its share of output, hampering resource-rich nations’ scope to push back.