Metals

Anglo breakup costs complicate a sweeter BHP deal

1 May 2024

The miner’s Australian suitor is mulling a hike to its $39 bln proposal. But if Anglo American were to demerge its listed South African units as part of the deal, BHP or any other buyer might inherit a $2 bln tax bill. That may limit BHP boss Mike Henry’s scope for generosity.

BHP investors throw CEO too short an M&A leash

26 Apr 2024

The miner’s stock fell 4.6% after the company proposed to buy Anglo American at a $39 bln valuation. It suggests shareholders fear boss Mike Henry will end up overpaying. But with his low-ball opener leaving plenty of wriggle room to justify upping the bid, that looks premature.

Anglo American has grounds to play hard to get

25 Apr 2024

The London-listed miner has received an all-share $39 bln bid from BHP. Anglo’s recent woes explain why, but its jumble of assets could be worth more. If boss Duncan Wanblad can show as much by outlining a plan B, he may yet see its $149 bln rival off – or extract a higher offer.

Glencore can leave Aussie listing plea in the pit

25 Mar 2024

Hedge fund Tribeca reckons the Swiss group would command a higher multiple if it moved its shares to Sydney from London. Down Under’s mining culture, powerful pension funds, and dividend tax breaks sound enticing, but are a valuation chimera for the coal- and trading-heavy firm.

US Steel tug-of-war threatens to pull it apart

19 Mar 2024

Cleveland-Cliffs has put its rival in a bind, rallying political and labor opposition to a $14 bln agreed sale to Japan’s Nippon while pushing its own questionable takeover bid. No deal at all would be bad news for the target’s union workers. A carve-up might be inevitable.

Nickel rout is energy-transition warning for West

8 Mar 2024

Prices of the battery metal have halved in a year, leaving many mines unprofitable or mothballed. Indonesia’s China-backed industry now dominates. Piecemeal aid and a green premium push are unlikely to alter that. Absent smart planning, copper and lithium are vulnerable, too.

Alcoa forges smart deal out of metal woes

26 Feb 2024

The US metal producer wants to buy Alumina, whose sole asset is 40% of a joint venture with its wannabe new owner. Benefits to Alcoa from the $2.2 bln deal include a simpler structure. And selling investors get a premium despite rising costs and falling aluminium prices.

Mining pain may be just getting started

22 Feb 2024

Falling prices for nickel, lithium and copper have hit earnings at Glencore and Anglo American. In this Viewsroom podcast, Breakingviews columnists explain why competition and dwindling demand for electric vehicles will keep key battery commodities under pressure.

Anglo American can mine Vale for revamp ideas

22 Feb 2024

The $30 bln miner is reviewing its asset mix after a ropey year. To ease its conglomerate discount CEO Duncan Wanblad could offload his struggling diamonds arm, but that’s not easy. Or he could follow his Brazilian peer and split off copper – perhaps using some outside cash.

Miner BHP brings tail risks up to the surface

20 Feb 2024

The company lost 86% of its half-year earnings, or $5.6 bln, to a writedown in its smallest business - nickel - and more provisions for a 2015 tailings dam disaster. Other parts are chugging along, but the charges are a reminder to shareholders of the industry's outsized hazards.

Nickel aid is too little, too late

19 Feb 2024

Miners of the electric vehicle battery metal will get royalty relief and help from Aussie taxpayers. It's unlikely to reverse decisions by First Quantum, IGO, and Wyloo to mothball projects after prices crashed. Developing critical minerals requires a robust long-term strategy.

Indonesia’s nickel policy looks fragile

26 Jan 2024

Outgoing President Joko Widodo's push to embed the country into electric-vehicle supply chains is under scrutiny ahead of elections next month. Global companies face an anxious wait to see if the policy will be fine-tuned; beyond the polls other threats are piling up too.

US Steel calibrates depth of trustbuster discounts

24 Jan 2024

Before Nippon prevailed, Cleveland-Cliffs fought hard to seal a deal, new documents show. Even $1.7 bln of synergy value and a chunky $1.5 bln break fee couldn’t sway the target, however. It’s a revealing portal into how competition authorities are altering merger decisions.

Glencore’s split is yet to be copper-bottomed

6 Dec 2023

Having merged its coal assets with Canadian miner Teck’s, the $70 bln Swiss group is eyeing a spinoff. But boss Gary Nagle faces a tricky call on what to do with oil trading. And the appeal of a coal-clean metals split may hinge on whether Teck’s own separation creates value.

LME win leaves one tricky question unanswered

29 Nov 2023

A court backed the London Metal Exchange’s decision to cancel $12 bln of nickel trades, rejecting a challenge by fund Elliott. The HKEX-owned venue has improved its standards. But the verdict does not address its conflict of being both a regulator and a commercial player.

Slowing China still leads the race for commodities

28 Nov 2023

The world’s second-largest economy may expand by a sub-par 4% next year. But that would be 27% of global growth. And Beijing’s shift from property to greener sectors will support its appetite for copper, steel and such. Investors looking just at the big picture risk missing out.

How the West can win the green metals race

21 Nov 2023

China dominates the processing of stuff essential to the energy transition. Rich countries can shift the balance if they accept more mining at home. Most of all, Europe needs to be better at recycling, critical materials expert Gavin Harper explains in the Exchange podcast.

Glencore deal is necessary detour on breakup path

14 Nov 2023

CEO Gary Nagle is buying 77% of Teck Resources’ coal arm for $6.9 bln as a prelude to a dirty-fuel spinoff. It’ll backfire if prices fall or authorities intervene. But it’s worthwhile given the reasonable valuation and chance to build a more appealing coal unit for investors.

Capital Calls: McDonald’s resilience

30 Oct 2023

Concise views on global finance: The Golden Arches’ global same-store sales rose 9% thanks to both selective menu-price increases and smaller meals in different markets. It demonstrates the company’s ability to keep pace with disparate economies’ stretched consumers.

EU-US steel unity may come at a high cost

19 Oct 2023

Europe could soon join the United States in whacking tariffs on other alloy producers. EU leaders and Joe Biden may want to shield firms like ArcelorMittal from Chinese imports. But helping the 130 bln euro industry could weaken global trade rules, and the bloc’s climate policy.