Mining

Africa uprisings carry stark oil-addiction warning

12 April 2019

Veteran leaders in Algeria and Sudan have been unseated. Rising unemployment, inflation and weak growth are the immediate reasons why, but a broader common theme is too heavy a reliance on crude extraction. That’s not a problem limited to Africa.

Zambia case puts corporate ethics guff on notice

11 April 2019

Britain’s Supreme Court says Vedanta can be sued in London for pollution offences in the African state. Multinationals have tended to trumpet corporate social responsibility at head office, while ignoring sins at subsidiary level. Whatever the case’s outcome, that will change.

Oligarchs take U.S. sanctions risk in their stride

8 April 2019

The Russian owners of Evraz recently cut their stake below 50 pct, which offsets potential heat over their Kremlin links. That doesn’t mean fellow metal groups like Severstal need to follow suit. Still, Oleg Deripaska’s recent travails imply little cause for complacency.

Iron ore surge masks Vale risks

3 April 2019

A fatal dam accident in January wiped almost $21 bln off the Brazilian company’s value. It has since clawed back most of that sum, thanks in part to a jump in the mineral’s price. Given the long-term cost of Vale’s second accident in three years, the recovery looks premature.

Rare-earth bid reverts Aussie conglomerate to type

26 March 2019

After spinning off supermarkets and selling coal, $27 bln Wesfarmers is back adding to its sprawl with a $1.1 bln offer to buy Lynas. The attraction of owning the only major producer of speciality ingredients outside China is clear, but the financial and strategic cases less so.

John Paulson gives Newmont late but valid advice

22 March 2019

The gold miner’s $10 billion Goldcorp offer terms aren’t good enough for the hedge fund manager, who owns a 2.7 percent stake. He has a point – recent gold deals haven’t featured premiums. But his campaign might have gained more traction had he started earlier.

Barrick wisely decides harmony is golden

11 March 2019

The gold miner has struck a joint venture with Newmont, an $18 bln rival it earlier tried to acquire. Both sides should win. Newmont gets to pursue its own deal with Goldcorp. Barrick shareholders are spared the risk of an aggressive merger that left them with little to gain.

Viewsroom: Hostile gold diggers

7 March 2019

The three-way takeover fight involving Newmont, Barrick Gold and Goldcorp is full of aggression and big egos. Breakingviews columnists unpick the gold-mining M&A frenzy and debate whether cooler heads can prevail. Plus: China telecom giant Huawei has a public-relations challenge.

Barrick can learn from mining’s golden oldies

6 March 2019

The gold miner seems to be warming to the idea of a joint venture rather than a merger with $18 bln rival Newmont. There’s a precedent: a decade ago BHP ditched a hostile bid for Rio Tinto in favor of a friendly iron-ore tie-up. That failed, but this time can be different.

Gold miners bury a good deal under two shiny ones

4 March 2019

Newmont has rejected an $18 bln stock offer from Barrick, saying shareholders fare better in its agreed purchase of Goldcorp. But Barrick’s arguments – and bigger benefits for Newmont’s owners – hinge on the two joining forces in Nevada. Neither merger is required for that.

Vale can keep pages from departing CEO’s playbook

4 March 2019

Fábio Schvartsman has stepped down weeks after a fatal dam collapse. Waiting for prosecutors to push the issue is bad form. Safety and governance will have to become bigger priorities for the $65 bln Brazilian miner, but many strategic and operational ideas are worth preserving.

Rio Tinto lays bare the mining paradox of plenty

27 February 2019

Including a special payout, the digger led by Jean-Sébastien Jacques returned a whopping $13.5 bln to shareholders last year. Despite Rio's ample cash, risks are rising and safety problems like Vale’s will lift costs. That should keep the industry's growth ambitions in check.

Hostile gold merger has only glimmer of appeal

25 February 2019

Barrick Gold's $18 bln all-share bid for U.S. rival Newmont has a shred of financial logic from putting together neighbouring mines in Nevada. That's buried, though, beneath opportunism and hubris. The slim uplift for Newmont shareholders further dulls the deal's prospects.

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.