Mining

BHP will try a club deal for Anglo American

17 Dec 2024

The Aussie miner is now free to make another takeover proposal for its smaller rival, whose copper assets still appeal to CEO Mike Henry. But paying a big premium looks harder to justify second time round. Partnering with a rival like Glencore or Vale may smooth the way.

Korea’s value push is getting a much-needed spark

11 Dec 2024

President Yoon Suk Yeol's botched coup adds urgency for Seoul to curb the power of family businesses. Even before the political crisis, the KOSPI was one of the world's worst performing major stock indices. That makes $22 bln Korea Zinc's upcoming shareholding meeting a key test.

Mining M&A makes a mockery of windfall taxes

26 Nov 2024

Anglo American has just joined BHP and others disposing of coal assets in securing a cut from new owners if the fossil fuel's price soars. It's savvy but also breezily undercuts their objections to governments pulling similar tricks to reduce costs for consumers.

Gold surge adds glitter to tarnished miners

31 Oct 2024

The yellow metal is up 35% this year as investors fret about inflation. Gold miners like Newmont and Barrick have repeatedly failed to capitalise on the ore’s rising value. But new-found financial discipline and modest valuations present investors with a rare opportunity.

BHP’s dam disaster dealings leave a bad taste

21 Oct 2024

The miner and partners are offering Brazilian authorities $23 bln in damages for a 2015 catastrophe, but with most of it paid over 20 years. And BHP was in hot water trying to hinder a related $47 bln lawsuit in London. Both take the argument of protecting shareholders too far.

Rio’s $6.7 bln lithium bet is a pricey slow burn

9 Oct 2024

The $112 bln miner is paying a 90% premium to buy Arcadium in cash. That’s probably not justified by the synergies – and Rio Tinto has yet to reveal them. Boss Jakob Stausholm can point to forecasts of a lithium demand surge, but right now investors have to take his word for it.

Rio boss may be about to eat his M&A words

7 Oct 2024

Jakob Stausholm is in talks to buy Arcadium Lithium, soon after saying deals only make sense if cost cuts cover the premium. On that score, he can perhaps offer a 40% bump, valuing his prey at $4.2 bln. With one investor wanting double that, Stausholm faces an unpalatable choice.

Hong Kong economic pain is marginal gain for LME

4 Oct 2024

Port activity and land prices have fallen so far that the London Metal Exchange is eyeing warehouses in the financial hub. That may spur more Chinese buyers to use the bourse. But despite more than a decade of Hong Kong ownership, storage in mainland China remains out of reach.

AngloGold’s mid-size miner pounce may set a trend

10 Sep 2024

The US-listed group is paying $2.5 bln for Egypt-focused rival Centamin. High gold prices make it easier for bigger fish to bulk up via share-based deals. Rising production costs and future price volatility suggest more relative minnows could say yes to an adequate premium.

China steel woes will recast miners’ M&A desires

27 Aug 2024

Buying copper-heavy Anglo American would have helped BHP CEO Mike Henry reduce the $140 bln miner's dependence on iron ore. With the steel industry facing a "harsh winter", deals must look ever-more appealing to BHP, Rio and others. But stock price drops make tie-ups more costly.

Glencore may be the next UK listing to head west

7 Aug 2024

The $61 bln miner had planned to spin off its coal unit via a New York IPO. Given the pollutant’s profit remains alluring, it now won’t. But Glencore boss Gary Nagle could weigh up US investors’ greater fondness for fossil fuels, and opt to move the whole company instead.

Rio boss’s M&A red line may come back to haunt him

31 Jul 2024

Jakob Stausholm says the $110 bln miner will only do deals when synergies cover any premium it pays. That's usually sensible. But it might rule out buying early stage projects like rival BHP is in copper. And sometimes longer-term growth trumps shorter-term financial pain.

Anglo American has a job to exit post-BHP hole

25 Jul 2024

The $38 bln miner unveiled better-than-expected half-year earnings. But after fending off his Australian suitor, Anglo boss Duncan Wanblad has to give impatient investors good news on his self-help plans. Coal and diamond headaches make that increasingly hard to do.

Copper’s green step change is an uphill struggle

9 Jul 2024

Supplies of the red metal have to motor if the world is to adequately decarbonise. In this Exchange podcast Tae-Yoon Kim, senior energy analyst at the International Energy Agency, lays out the challenges that need to be overcome if the private sector is going to make that happen.

Anglo American’s revamp has an inauspicious start

1 Jul 2024

The easiest part of the $41 bln group’s overhaul after BHP’s takeover bid was a sale of its coking coal business. A months-long closure of that unit’s most profitable mine may make an expected $5 bln valuation harder to achieve. That increases the pressure on CEO Duncan Wanblad.

Miner M&A spotlight may shift to Teck and Freeport

27 Jun 2024

BHP’s failed pitch for Anglo American leaves a vacuum for keyed-up mining bankers to fill. Canada’s $25 bln Teck and $70 bln US rival Freeport-McMoRan both offer purer-play copper options. Either could become targets for bigger fish, or even drive consolidation themselves.

Mining M&A stokes coal race against cleaner power

20 Jun 2024

Anglo American will soon offload dirty deposits used to make steel as part of CEO Duncan Wanblad’s overhaul. Rival sales suggest there should be plenty of suitors. Coking deals can pay off for buyers if prices stay high and green options develop slowly, but neither is assured.

Failed Anglo bid is net negative for BHP CEO

29 May 2024

Mike Henry has ditched the Australian miner’s $47 bln attempt to buy its UK-listed rival. He misjudged the difficulty of pushing Anglo to divest South African assets. But he avoided upsetting investors by overpaying, and if his target’s breakup plan falters he can try again.

Rio Tinto’s dual listing belongs in history books

28 May 2024

Activist fund Palliser is overegging the 44% boost holders of the miner’s London stock could get if Sydney became its primary bourse. But there’d be some uplift. And CEO Jakob Stausholm could use a more level M&A playing field as BHP potentially kicks off a wave of consolidation.

Copper’s M&A mania obscures a dysfunctional market

23 May 2024

The red metal is the main driver of BHP’s $46 bln bid for Anglo American. But despite expectations that the energy transition will boost demand, prices are still too low to tempt miners into expanding production. Mergers may help break the deadlock, but aren’t certain to do so.