Mining

Gold miners bury a good deal under two shiny ones

4 Mar 2019

Newmont has rejected an $18 bln stock offer from Barrick, saying shareholders fare better in its agreed purchase of Goldcorp. But Barrick’s arguments – and bigger benefits for Newmont’s owners – hinge on the two joining forces in Nevada. Neither merger is required for that.

Vale can keep pages from departing CEO’s playbook

4 Mar 2019

Fábio Schvartsman has stepped down weeks after a fatal dam collapse. Waiting for prosecutors to push the issue is bad form. Safety and governance will have to become bigger priorities for the $65 bln Brazilian miner, but many strategic and operational ideas are worth preserving.

Rio Tinto lays bare the mining paradox of plenty

27 Feb 2019

Including a special payout, the digger led by Jean-Sébastien Jacques returned a whopping $13.5 bln to shareholders last year. Despite Rio's ample cash, risks are rising and safety problems like Vale’s will lift costs. That should keep the industry's growth ambitions in check.

Hostile gold merger has only glimmer of appeal

25 Feb 2019

Barrick Gold's $18 bln all-share bid for U.S. rival Newmont has a shred of financial logic from putting together neighbouring mines in Nevada. That's buried, though, beneath opportunism and hubris. The slim uplift for Newmont shareholders further dulls the deal's prospects.

Agarwal’s Anglo carve-up has a new stumbling block

21 Feb 2019

The Indian tycoon’s rent of a fifth of the mining group’s shares implies he might want to lobby for a breakup. To do so he’ll need to get Anglo American’s next biggest investor, South Africa’s state pension fund, on side. That’s beginning to look less and less likely.

Glencore treads fine line between green and black

20 Feb 2019

CEO Ivan Glasenberg will keep coal output at current levels. That’s surprising for a miner which makes a third of group EBITDA from the pollutant. But given the company’s various other hard-to-solve regulatory headaches, bringing ESG investors onside is a logical proactive step.

BHP sets judicious pace for big diggers

19 Feb 2019

Two fires and a runaway train smudged first-half profit at the world's largest miner. BHP cut debt to below its target and said it is eyeing $9 bln in free cash in the year to June, at current commodity prices. But CEO Andrew Mackenzie kept the tone cautious and spending flat.

Miners’ Congo optimism is post-Kabila sugar-rush

13 Feb 2019

Joseph Kabila’s exit as the African giant’s leader is generating some positive vibes. Reminders of Congo’s vast mineral potential are light relief for shareholders beaten down by government shenanigans. But they won’t help convince Kinshasa to treat the industry any better.

Anil Agarwal’s Vedanta antics are self-defeating

1 Feb 2019

A unit of the Indian tycoon’s mining company is buying some of his personal holding in Anglo American. Minority shareholders wiped off one-fifth of the company’s value. Given any swoop by Agarwal on Anglo may require winning minorities over, it’s an odd move.

Vale’s Brazil dam damage will hurt its peers too

29 Jan 2019

A second disaster in three years has already cost the mining giant $19 bln in market value. Fines and a management overhaul will likely follow. Fresh scrutiny from stakeholders will hit an industry already grappling with high costs, slow projects and risk-averse shareholders.

Vale disaster threatens Brazil’s deregulation push

28 Jan 2019

A lethal dam collapse wiped $18 billion off the mining company’s value. It may also derail President Jair Bolsonaro’s plans to bolster business by rolling back environmental and other regulations. Angry Brazilians and skittish lawmakers may want to go in the opposite direction.

Oleg Deripaska’s En+ deal is more sour than sweet

23 Jan 2019

The settlement that distanced the Russian oligarch from his power company has favourable aspects, the New York Times says. Certain provisions could even limit the financial hit from U.S. sanctions still in place against him. The overall outcome is, however, still pretty painful.

Chaotic election ruling raises Congo split risk

21 Jan 2019

The African nation’s top court rejected complaints by runner-up Martin Fayulu, who says the Dec. 30 vote result is fraudulent. Unofficial tallies say he is right. His supporters in Congo’s mining belt could now push for a split from Kinshasa – leaving cobalt supply in turmoil.

Size matters less than gold miners think

17 Jan 2019

Newmont's $10 bln Goldcorp purchase creates a behemoth, and the U.S. miner has talked up options from extra assets, plus steady output and dividends. But its investors are right to be sceptical. Management will have to over-deliver on synergies to secure them a good return.

Miners can close the confidence gap in 2019

16 Jan 2019

Stock markets point to a rough year for diggers, valuing each dollar of expected cash at a stubbornly hefty discount. Investors are fretting about a Chinese slowdown and don’t trust cashed-up bosses at Rio, BHP and the like to restrain themselves. The reality may be brighter.

Newmont’s $28 bln gold merger is an alloyed good

14 Jan 2019

The U.S. gold miner is swallowing Canada’s Goldcorp in an all-share deal. Rivals Barrick and Randgold already bulked up in a similar deal, and the 17 pct premium is slim. Yet Newmont is handing over most of the benefits, and even those might be hard to extract.

U.S. Oleg Deripaska deal tougher than it looks

20 Dec 2018

Washington’s decision to lift sanctions on En+ and allow the Russian oligarch to keep a 45 pct stake sounds lenient. Yet it looks difficult for Deripaska to sell his stake for cash or exercise decisive influence. After a messy beginning, the U.S. raid seems a qualified success.

Rio will turn big miners back into big spenders

20 Dec 2018

Despite fat cash piles, mining groups have been slow to acquire. With new projects costly and demand high, copper was already a good strategic bet even before trade war jitters caused a price slump in 2018. Expect Rio Tinto to come calling for $15 bln U.S. rival Freeport.

Glasenberg successor will run a different Glencore

13 Dec 2018

The commodities giant’s combative boss says he will retire in 3 to 5 years. It’s unclear who will replace him, even after a recent reshuffle. With a U.S. subpoena and other woes weighing heavily on the stock, Ivan Glasenberg may yet be tempted to consider a much bolder overhaul.

Miners’ digging rush is a chance to show restraint

10 Dec 2018

Exploration, which stalled as prices crumbled after 2011, is back. Speculation over Rio Tinto’s drilling in Australia’s Great Sandy Desert, for example, has sent rivals on a copper-hunting frenzy. With deals scarce, such moves make sense, so long as the diggers stay disciplined.