Commodities

ThyssenKrupp stumble strengthens case for breakup

24 Nov 2016

The German engineer's recovery is fizzling. Falling earnings reveal the weak case for combining elevators, car parts and submarines. CEO Heinrich Hiesinger wants to hive off steel but defends his eclectic collection of capital goods. It’s time for more radical ideas.

Rio Tinto takes bitter but helpful graft medicine

17 Nov 2016

The Anglo-Australian mining giant sacked two senior employees amid a probe into payments made in Guinea. High corporate ethics are admirable but hard to apply in frontier markets. Yet turning a blind eye to corruption benefits neither resource owners nor investors.

Rio Tinto trips into bribery mine shaft in Africa

9 Nov 2016

The $67 bln mining giant has another scandal on its hands in Guinea, despite tightened controls after a similar problem in China. It's unlikely to derail the sale of Rio's remaining stake in the $20 bln Simandou iron-ore project to Chinalco, but collateral damage is unavoidable.

Nasser’s exit gives BHP chance to reinvent itself

20 Oct 2016

The Anglo-Australian miner's departing chairman, Jac Nasser, delivered middling returns and a narrow vision for the future during his six-year tenure. BHP wants its workforce to be more diverse. A good place to start would be at the top. New blood and new thinking is long overdue.

Milk recovery sounds sour note for food producers

19 Sep 2016

Dairy Crest says higher cream prices could hit its margins, though it expects to meet full-year guidance. Sharp falls in milk prices over the past two years mean there are now fewer cows to go around. Yet as the cycle recovers, it's hard to pass higher costs on to consumers.

India’s Silicon Valley finds H2O everyone’s worry

14 Sep 2016

A dispute over water shut down the tech hub of Bengaluru. The city’s IT giants and startups are not water-intensive, yet global firms like Accenture and Infosys suffered. It is a reminder that environmental issues are costly, indiscriminate, and evermore real.

Spanish utility seeks credulous new investor

2 Sep 2016

Oil firm Repsol and industrial group Criteria Caixa want to offload 20 pct of Gas Natural. A potential 4 bln euro deal would simplify things for the two sellers. A buyer, though - most likely a private equity or infrastructure investor - would be taking a fair bit on trust.

Potash giant emerges from ashes of failed deals

30 Aug 2016

Merger talks between Canada's Potash Corp and Agrium follow a string of aborted combinations dating back to Australian miner BHP Billiton's $39 bln swoop on Potash in 2010. As a commodities boom has gone bust, friendly attempts to forge a more modest merger look achievable.

Glencore’s risk-taking culture dies hard

24 Aug 2016

The world’s third-largest mining group deserves credit for selling assets, cutting debt and managing costs, but confidence in its strategy remains fragile. A $395 million coal hedging loss isn’t encouraging. Glencore is facing a trade-off between growth and security.

BHP Billiton reaches earnings nadir

16 Aug 2016

A ray of light is appearing for the mining giant. Weak global demand and a Brazilian dam disaster were partly to blame for a record $6.4 bln full-year net loss but the worst has passed. As long as prices stabilise, cost-cutting will allow BHP to return more cash to shareholders.

Gas mega-merger looks short on solids

16 Aug 2016

A potential $63 bln merger of Praxair with Germany’s Linde could cut the industrial gas market from four big players to three, and create more value than the earlier union of Air Liquide and Airgas. Yet despite strategic appeal, it’s hard to see a deal making financial sense.

Rio Tinto’s best is not yet good enough

3 Aug 2016

The Anglo-Australian miner has slashed debt but can't take its eye off the ball after posting its worst earnings in 12 years. No wonder Rio is trading at a discount to peers. New boss Jean-Sebastien Jacques is paying out dividends, but has his work cut out to win over investors.

Water woes are a drain on Make in India

26 Jul 2016

India has long undervalued one of its most precious resources. Chronic mismanagement of water in the country is already a strain on factories. Now the worry is that it will hold back Prime Minister Narendra Modi’s big plan to create jobs and turn India into a manufacturing hub.

Indian tycoon’s sweetened Cairn bid is still sour

25 Jul 2016

Anil Agarwal's mining group Vedanta has upped its offer to buy out the minorities of its cash-rich Indian subsidiary. The 9 percent premium looks far from compelling. The fate of the $2.4 bln bid rests with Cairn India's two largest outside investors.

Exxon’s New Guinea sojourn stirs oil M&A waters

19 Jul 2016

The U.S. oil giant's $2.3 bln offer for Papua-focused gas explorer InterOil topped an earlier approach from rival energy group Oil Search. Though it's Exxon's biggest swoop since crude prices crashed, it looks more like opportunism than a catalyst for an impending deal wave.

Review: To have and have not, Brazil-style

1 Jul 2016

In "Brazillionaires," Alex Cuadros explores Latin America's biggest economy through its wealthiest citizens, whose fortunes he tracked as a reporter. It's a tale of boom, bust and back-scratching among moguls and politicos that sheds a telling light on the nation's current woes.

In-market M&A goes off-script in Japan

29 Jun 2016

Combining with a local peer shouldn't be too hard. Not so with Japanese refiners Idemitsu and Showa. Idemitsu's top backer thinks the group, which is close to Iran, should avoid Saudi-backed Showa. The concerns look overblown – and waiting a year to air them is downright bizarre.

Bankers can learn from miners about culture change

15 Jun 2016

Rio Tinto, BHP and their peers have spent years improving their safety records. The finance industry can learn a thing or two from the way that miners have tried to clean up their act. Not least is the ambition to attain higher standards than absolutely required by the law.

Giving watchdog algorithm keys is slippery slope

14 Jun 2016

The CFTC wants to inspect source codes of trading firms without a subpoena. The U.S. agency says it’s needed for records retention. Unclear is whether the regulator can safeguard such intellectual property, and it opens the door for other officials to request similar access.

Noble’s cash call will buy it one year

3 Jun 2016

The commodity trader is tapping shareholders for $500 mln days after its CEO resigned. The rights issue and other disposals should cover $2 bln of debt due next year. But Noble is still asking investors to believe its core business will be able to consistently generate cash.