Commodities

Russia’s wheat tax scrapes bottom of policy barrel

22 Dec 2020

Fiscal conservatism and administrative issues make it tricky for Moscow to support citizens via European-style furloughs. Its Plan B, a levy on wheat exports, is supposed to limit domestic food price inflation. But in doing so it will probably undermine a key Russian industry.

Rusal’s Deripaska discount makes partial return

21 Dec 2020

The aluminium group’s Hong Kong shares fell after a Bloomberg article claimed former controlling shareholder Oleg Deripaska still exerts influence. Rusal and holding company En+ deny that he does. So far, investors are not taking fright like they did in April 2018.

Ominous iron ore seam opens in Aussie trade row

18 Dec 2020

Chinese state buyers are griping about how the steel ingredient is priced as officials Down Under debate an export tax. Beijing already has targeted wine and other imports. The idea that miners BHP and Rio might get dragged into the spat can no longer be discounted.

Rio’s new CEO reflects its lack of wiggle room

17 Dec 2020

Finance director Jakob Stausholm is the surprise choice to lead the $126 bln miner. Rio’s self-imposed difficulties in Mongolia and Australia meant an outsider might have been preferable. But given Rio may feel the need to soon replace its chairman, continuity is also important.

Rio Tinto’s CEO search just got even harder

10 Dec 2020

A scathing government report over the Australian miner’s destruction of Aboriginal sites calls for sweeping changes. It portends a long slog to repair the $120 bln company’s reputation. Corporate governance and climate issues add to the daunting challenges concerning growth.

Hitachi unit buyout requires steely resolve

8 Dec 2020

KKR and Bain are among the suitors for the Japanese conglomerate’s $6 bln metals business. The company has fallen on especially hard times during the pandemic. It will take a big recovery and then some to generate a healthy return on the deal. A carve-up may even be in order.

Glasenberg-less Glencore is surprise green champ

4 Dec 2020

Gary Nagle is the miner’s new CEO. The South African inherits a different firm to the one compatriot Ivan Glasenberg led. Running down coal mines to hit zero CO2 emissions by 2050 and boosting copper and cobalt pitches Glencore as an unlikely centrepiece of the green transition.

Stingy copper buyout may tarnish Kazakh listings

17 Nov 2020

Two shareholders of 3 bln pound miner Kaz Minerals want to take it private. The offer looks low and premature, given uncertainty over the prospects of the Eurasian group’s biggest asset. An opportunistic takeover may further dent London’s appetite for companies from the region.

Louis Dreyfus’ Gulf deal makes future less fraught

11 Nov 2020

The commodities trader has sold a 45% stake to Abu Dhabi. An $800 mln-plus inflow will ease the group’s debt burden and fund a shift into more lucrative areas. The broader shareholder base should also end a phase of owner Margarita Louis-Dreyfus paying herself bumper dividends.

Aussie gold miners make deal wishes come true

6 Oct 2020

Northern Star is acquiring smaller rival Saracen for $4.1 bln. They’ll share a heap of promised synergies without a premium to pay for using a structure touted by an industry shareholder group. The buyer’s track record also should mitigate some typical merger concerns.

Copper bulls may bust through China shop

5 Oct 2020

The metal’s price has jumped around 40% since March, hitting multiyear highs. Increased Chinese demand, tight supply and a weaker dollar played a part. Higher inventories could bring a reversal. But with a boom in renewable-energy infrastructure, optimists have the right idea.

Corona Capital: Kraft Heinz, U.S. poverty

15 Sep 2020

Concise views on the pandemic’s corporate and financial fallout: The food giant is boosting advertising outlays, even as it continues cutting costs; and the poverty rate in the United States hit a low at the end of 2019, according to new data, only to run into a Covid reversal.

Rio Tinto rebellion sets new ESG bar

11 Sep 2020

CEO J-S Jacques and two deputies will step down after an outcry over the miner's destruction of Aboriginal heritage sites. Aussie shareholders led a charge that may inspire other socially conscious investors. Bosses and boards hiding behind strong returns have been given notice.

Rio Tinto board can choose CEO – at expense of ESG

10 Sep 2020

Many shareholders want harsher punishments for the mining giant’s destruction of Aboriginal heritage sites. Robust returns are one reason to stop short of axing boss Jean-Sebastien Jacques. If he stays, though, Rio’s responsible investing credentials will be deeply discounted.

De Beers’ rocks are in an increasingly hard place

3 Sep 2020

Even before Covid-19, the Anglo American-owned diamond giant’s lunch was being eaten by Russia’s Alrosa and cheaper man-made stones. De Beers still has access to Botswana’s high-quality gems. But lockdowns are blunting the edge its quirky sales method has enabled.

Corona Capital: Davos delay, Political TV ratings

26 Aug 2020

Concise views on the pandemic’s corporate and financial fallout: The World Economic Forum’s annual winter meeting becomes a summer gathering; and in the U.S., the Democrats’ online spectacle leads TV ratings over the Republicans’ more traditional convention.

Fashion can bear the costs of virtue cotton

25 Aug 2020

Most of China’s crop comes from the persecuted Uighurs’ home region. Forced labour may taint some of that, but clothes makers do not yet trace their complex supply chains back to the farms. Scrutiny from politicians and investors means careful sourcing makes financial sense.

Mali’s gold miners are used to political upheaval

20 Aug 2020

President Keita quit after soldiers seized him at gunpoint. His exit from the helm of a hollowed-out Saharan state changes little for foreign firms like Resolute Mining. But with no clear government and Islamists controlling half its territory, Mali is a geopolitical problem.

Glencore’s Glasenberg shows odd dividend caution

6 Aug 2020

The gunslinging boss of the big miner-trader is holstering this year’s $2.6 bln dividend. The company blames coronavirus uncertainty, but Glencore’s cash flow is holding up and metal prices are mostly recovering. The South African may be bracing for a hefty U.S. corruption fine.

China’s economic recovery looks squiggle-shaped

30 Jul 2020

Budweiser, KFC and Rio Tinto point to reviving sales in beer, fried chicken and steel. Industrial profit is up too. But the rebound is unevenly distributed across sectors and regions, and employers are still shedding jobs. As pent-up demand is sated, the optimism might fade.