Commodities

Exchange-traded funds will keep gold glittering

21 Jun 2019

The yellow metal’s price has broken $1,400 an ounce and touched highs last seen in 2013, thanks to scope for lower U.S. interest rates and Gulf tensions. Yet holdings in the largest gold-backed ETFs are only just joining the rally. That should mean bullion keeps its shine.

Potash makes better sense for BHP than shale

20 Jun 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 Jun 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.

Africa’s sweet cocoa cartel misses bigger prize

14 Jun 2019

Ivory Coast and Ghana have set a minimum selling price for the chocolate ingredient to try to help farmers. The pair control two-thirds of global supply, way more than OPEC does for oil. The real riches in cocoa, though, lie in processing the beans, not just growing them.

Iron ore complicates Australia’s growth challenge

12 Jun 2019

The rising price of the steel ingredient has yet to boost investment in mining, or wages. But it is making the local dollar more resilient to trade tensions and a rate cut. That means the economy, expanding at its slowest annual rate in a decade, is even harder to revive.

Thorny Acacia pricks Barrick boss’s Africa bubble

11 Jun 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.

Beyond Meat gets extra fire from being rare

7 Jun 2019

The meatless-burger maker reported first-quarter numbers only a hair better than it already estimated yet the stock, which had already quadrupled since its IPO a month ago, surged more than 15%. A $7 bln valuation is too hot – but then it’s the only item of its kind on the menu.

Rare earths expose the trouble with next-gen M&A

6 Jun 2019

Beijing's threat to squeeze sales of the minerals has boosted $1.3 bln Lynas, one of few non-Chinese producers. That’s a blow for suitor Wesfarmers. It's also a reminder of how limited targets and opaque prices have challenged corporate heavyweights looking to tap new metals.

Shell’s giant cash gusher is climate-change hedge

4 Jun 2019

The oil major plans to hand half its $250 bln market cap to investors from 2021-2025. As a result, the share of resources poured into capital investment will fall. It may look short-termist, but it’s really a sensible admission of uncertainty about the future of fossil fuels.

Steel is awkward candidate for UK bailout largesse

31 May 2019

Thirty years after privatisation, a big chunk of Britain’s steel sector is going bust. The UK’s scope to offer support is less hopeless than it might appear, but the government would need to be convinced the industry is strategic and sustainable. Neither is obviously the case.

Gazprom payout pledge yet to catch fire

31 May 2019

After a management shake-up, the $78 bln gas company says it will pay out half its net income in dividends in coming years. That would please the state, which has been pushing the issue. But the implied dividend yield of 15% suggests investors doubt the bonanza will happen.

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.

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.

Coal bears marks of Beijing’s policy smudges

15 May 2019

China is moving away from the smoke stack, but imports of the black stuff rose 14% in April. That’s deceptive: it’s a fuel caught in transition, between demand for blue skies and blue-collar jobs. Domestic supply will rise, but long-term, foreign purchases are likely to fall.

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.

Private equity’s North Sea bet safer than it looks

9 May 2019

Buyout groups are pumping billions of dollars into the hydrocarbon field off the UK’s eastern coast, as oil majors depart. Peak fossil fuel demand and decommissioning costs complicate the usual private equity exit strategy. But the acquirers also have ways to minimise the risks.

Refined Occidental bid leaves one box unchecked

5 May 2019

The $43 bln U.S. oil driller upped the cash in its offer for rival Anadarko. Financing from Warren Buffett and a side-deal to sell assets to Total make it look deliverable. Dispensing with a vote by Oxy shareholders should boost the bid too, though not investors’ peace of mind.

En+ chair gets relatively meagre sanctions bonus

2 May 2019

The Russian energy group has given Chairman Greg Barker $4 mln for successfully lobbying against U.S. sanctions, Bloomberg says. En+’s market value is up $1.5 bln since it avoided the strictures. Paying 0.3 pct to detoxify its business is a reasonable exchange.