Commodities

Icahn knows a playbook to avoid with SandRidge

4 Dec 2017

As the governance-challenged driller did last week, CVR Energy tried to fend off the activist with a poison pill back in 2012. Icahn ended up bidding for the refiner and still owns 82 pct of it. It’s an experience neither he nor other shareholders will relish repeating.

Rio Tinto plays it safe with compromise chairman

4 Dec 2017

After a nine-month search, the $90 bln miner picked director Simon Thompson over former Xstrata boss Mick Davis to lead the board. His mining, emerging-market and buyout knowhow should prove useful. A fresh push to squeeze out cash is another sign Rio is keeping risks calculated.

Rio Tinto holds valuable card in Jakarta deal

30 Nov 2017

As Freeport-McMoRan thrashes out terms for handing over a majority stake in the Grasberg copper mine to Indonesia, Rio's production arrangement dating back to 1995 gives it an effective veto. The best way to play this ace up its sleeve would be to negotiate a graceful exit.

Rio Tinto distracted by shiny new thing

22 Nov 2017

The mining giant is mulling a stake in $15 bln lithium producer SQM. Rechargeable-battery fever has helped lift the Chilean company's valuation to a tech-like multiple. Deals will return with industry growth, but after past mistakes including Alcan, Rio is looking late again.

Rio Tinto could have high-grade chairman in Davis

14 Nov 2017

Big miners usually prefer statesman-like chairmen to dealmakers. So former Xstrata boss Mick Davis would be an odd choice at Rio, especially at this point in the commodity cycle. But he’s smart, thinks big and would keep headstrong CEO Jean-Sébastien Jacques on his toes.

BP offers window into slippery pipeline valuations

7 Nov 2017

The oil giant recently seized on an uptick in oil prices to list pipeline assets, but its shares have disappointed. One problem is the fact it's so dependent on BP. But given recent issues, investors are also wise to be cautious about pipeline operators' balance sheets.

ABF’s sweet tooth will weigh on valuation

7 Nov 2017

The beets-to-boots seller is doing well in fashion as its Primark stores win market share from rivals. But profit in the sugar business will fall as EU prices dip. The exposure to commodity price swings makes it hard to justify a valuation approaching that of Zara owner Inditex.

Booming metal markets test mettle of memories

2 Nov 2017

The frenzy over electric cars is helping push copper, nickel and cobalt prices to their highest in years. An expected supply squeeze is also a factor. After frolicking in London this week, global miners get a shot to prove they've learned from cycles past and can use cash wisely.

EQT and its critics make up to break up

1 Nov 2017

The gas company and activists are seeing the value of dialogue. After investors opposed a $7 bln plan to buy rival Rice, management has vowed to speed up work on a split. Shareholders now look set to approve the deal – and retain the threat of a proxy war to keep the firm honest.

Glencore’s Hong Kong exit sends message to Aramco

31 Oct 2017

The secondary listing touted as a gateway to Chinese investors during the miner's 2011 IPO never lived up to the hype. The same goes for Coach and others, who could be forgiven for following Glencore out. It's also a good sign the Saudi oil titan can cross Hong Kong off its list.

Big Oil’s well-plugged holes do their job, for now

27 Oct 2017

Exxon, Chevron and Conoco all posted decent earnings for the third quarter. And they’re ramping up production - even Conoco, despite cutting capex. That’s proof their endeavors to adapt to $50-a-barrel oil are paying off. Improving from here, though, could prove tricky.

Saudi utopia plan is so bonkers it just might work

26 Oct 2017

The nation’s crown prince plans to build NEOM, a shining $500 bln city on the Red Sea where entrepreneurs draft the rules and robots outnumber people – and which one day will be a publicly listed company. Dreamers are welcome, but he'll need capable doers above all else.

Chinese oil major CNOOC tests limits of self-help

25 Oct 2017

Results show the Chinese state-owned oil giant has clambered out of a hole. An ill-timed 2013 acquisition of Canada's Nexen forced relentless cost-cutting which is now paying off. Stubbornly weak crude prices, and China's electric vehicle push, could cap investors' appreciation.

Cox: Aramco clouds Saudi’s coming-out party

24 Oct 2017

The kingdom’s crown prince is hosting a mini-Davos this week to showcase Riyadh's charms as a financial center. From Masayoshi Son to Steve Mnuchin, participants may mostly avoid questions about one of his key goals: the touted but uncertain market debut of oil giant Aramco.

Noble’s bid for survival takes humbling turn

23 Oct 2017

The stricken commodities trader is offloading oil-liquids, one of the better bits of its shrinking business. A long list of terms, however, suggests buyer Vitol capitalized on the distress. Efforts to raise $1 bln more to pay off debt amid a big loss could face similar hurdles.

Mistimed writedowns lesser of mining M&A evils

18 Oct 2017

Rio Tinto has been accused by the SEC of hiding the plunging value of a coal mine it bought in 2011. The charges are serious, but at least accounting procedures are fairly clear. If only there were rules that could prevent mining bosses getting carried away during M&A upswings.

China is third-best option for Saudi Aramco

16 Oct 2017

With its $2 trln public offering in the balance, the Saudi oil giant may bring in a Chinese investor. That would provide cash the state doesn’t urgently need. The other perks of an international IPO, like regional influence and financial discipline, aren’t to be found in Beijing.

U.S. oil production squabble misses price point

12 Oct 2017

Tycoon Harold Hamm says aggressive government forecasts skew where Texas crude trades. Inventories are falling, but it's a weak trend. Shale momentum will be hard to stop and Shell's electric-car bet sends a fresh signal on future demand. Expect about $50 a barrel to be the norm.

More for China than London in Russian hydro IPO

5 Oct 2017

Oleg Deripaska’s En+, which controls aluminium outfit Rusal, aims to raise $1.5 bln in an LSE and Moscow listing. It touts a green model, but public investors will have little say. The cornerstone backer, a partner of the PRC group that just bought into Rosneft, may do better.

Agarwal’s Anglo wager is risky way to plot breakup

21 Sep 2017

The Indian billionaire is doubling down. Paying as much as 1.5 billion pounds to raise his stake in the UK-listed miner to 20 pct may be a way of trying to force a breakup. But unpredictable commodities prices and South Africa’s volatile politics could scupper any such plans.