Metals

Glencore’s Teck gambit could slip on an oily patch

6 Apr 2023

The Swiss commodity giant’s $22 bln plan to buy its Canadian peer and spin off its coal arm offers an alternative to investors voting on Teck’s own breakup plan. Yet Glencore’s oil trading unit may hurt the value of the non-coal bit. Teck’s pitch has flaws too, but looks cleaner.

Glencore’s coal fudge risks satisfying no one

15 Feb 2023

The dirty fuel is booming, and made up half of the $80 bln commodity giant’s 2022 EBITDA. Green investors may want CEO Gary Nagle to phase it out faster, while financially motivated ones would favour more mining. He’s doing neither, and paying the price with a middling valuation.

Gold miner unearths risky M&A seam

6 Feb 2023

U.S.-based Newmont is offering $17 bln for Australia’s Newcrest. On paper, a deal would stack up. But Canadian rival Barrick, which Newcrest spurned in 2019, might jump back into the fray. It has the makings of a value-destructive bidding war.

Capital Calls: McDonald’s ex-CEO fine

10 Jan 2023

Concise views on global finance: The Security and Exchange Commission’s decision to slap former fast food chain boss Stephen Easterbrook with a penalty is a convoluted way to the right outcome.

East-West battleground will shift to metals

23 Dec 2022

After clashing with gas producer Russia, Europe has scrambled to diversify energy supplies to prop up its industries. Western companies will soon feel uneasy relying on China for lithium and nickel, key to a $5.3 trln green push. Expect a pile-up of mining and recycling deals.

Nickel IPO puts Jakarta at centre of China EV boom

23 Nov 2022

China’s Lygend Resources, a trader-turned-producer of critical battery ingredients, is eyeing a $600 mln Hong Kong listing. A huge presence in Indonesia gives it an edge over rivals at home, where supply is scarce. That should help the company navigate a bumpy stock market.

Capital Calls: Ticketmaster and Taylor Swift

18 Nov 2022

Concise views on global finance: A meltdown involving the pop star’s upcoming “Eras” concert tour is attracting an audience on Capitol Hill and risks an unwanted corporate fight with the artist herself.

Philip Morris and Rio’s poker faces need some work

7 Nov 2022

The $139 bln Marlboro maker and $95 bln miner have upped buyout offers to try and clinch strategically key deals. In both cases, hedge funds and minority investors called their bluff. The lesson is that bidders can’t play hardball if everybody knows they really need a deal.

Capital Calls: Peloton races tough economic cycle

6 Oct 2022

Concise views on global finance: The $2.9 bln fitness company is laying off staff for the fourth time this year in a turnaround bid for survival.

Disney’s big ESPN choice, Rio Tinto Mongolia drama

15 Sep 2022

Activist Dan Loeb backed away from his demand that the $203 bln media firm sell its sports network. In this Viewsroom podcast, Breakingviews columnists debate whether it’s the right move. And the $94 bln mining giant’s attempt to secure copper supply may need heavier machinery.

China’s battery maker has an IPO charging problem

15 Sep 2022

China Aviation Lithium is low on power ahead of its $1.5 bln Hong Kong float. The CATL wannabe is growing fast but its profit leans on government subsidies. Throw in high dependence on a single automaker and ties to a sanctioned entity, and it looks like a difficult ride.

Rio’s Mongolian buyout saga has further chapters

13 Sep 2022

Some investors in Turquoise Hill Resources, which owns 66% of the huge Oyu Tolgoi copper project, have spurned the $97 bln miner’s latest pitch. Rio Tinto’s offer is much improved, and backed by the Turquoise board. But minorities have some grounds to hold out for yet more.

Capital Calls: Amazon’s green coupons, Peloton

25 Aug 2022

Concise views on global finance: The internet giant’s promise to try green hydrogen technology is valuable to firms like Plug Power, so Amazon demands a taste. Investors in the exercise-bike maker suffer a rapid descent after dismal fourth-quarter earnings.

BHP’s bumper year is bad news for its M&A quarry

16 Aug 2022

The mining giant’s record EBITDA and dividend suggest it could up its $5.8 bln rejected offer for OZ Minerals. But the impressive performance is in part due to better overall discipline that investors are only just appreciating. Boss Mike Henry will be reluctant to change course.

Rio minorities’ bet is far from copper-bottomed

15 Aug 2022

Investors who hold the 49% of Turquoise Hill Resources not owned by the mining giant have spurned a $2.7 bln offer to buy them out. True, copper prices could rebound and hike the value of their giant Mongolian copper mine. But Turquoise’s minorities may need a deal more than Rio.

BHP’s metals deal could use some schmuck insurance

8 Aug 2022

CEO Mike Henry’s rebuffed $5.8 bln bid for OZ Minerals pits a mining giant trying to bulk up on nickel and copper, vital to electric cars, against a scrappier rival. Offering performance payouts on top of a premium would help address both sides’ risk and reward calculations.

War helps Russian nickel king expand his realm

5 Jul 2022

Tycoon Vladimir Potanin may merge Norilsk Nickel with aluminium maker Rusal. The West would be extra wary of sanctioning such a giant for fear of roiling metals markets. The pair may have some synergies, but their two main owners don’t get on. It would be a governance nightmare.

Capital Calls: Fed faces inflation divergence

30 Jun 2022

Concise views on global finance: The central bank’s preferred measure of rising prices, the U.S. personal consumption index, rose 6.3% in May. That’s more subdued than the surging consumer price index. But the latter offers a better read on household spending.

LME’s best hope is to pay up, then shape up

7 Jun 2022

Elliott Management is suing the London Metal Exchange for voided nickel trades. If it wins its judicial review, the LME could take a flood of further legal blows. Its Hong Kong owner’s best defence may be to pre-emptively compensate angry traders, whilst rebooting governance.

Capital Calls: Airbnb, Prudential, Glencore

25 May 2022

Concise views on global finance: The $68 bln vacation-booking platform will shut its Chinese business; the insurer appoints a new CEO – finally; the commodities giant has a $10 bln reason to keep its nose clean, after a $1.5 bln settlement for corruption allegations.