Mining

Glencore Congo settlement is a calculated risk

15 Jun 2018

Paying royalties to Israeli businessman Dan Gertler in euros rather than dollars helps solve the commodities giant’s headache in the African country, while avoiding falling foul of American sanctions. The danger, though, is that the United States changes the goalposts.

Glencore solves least troubling Congo problem

13 Jun 2018

A debt-for-equity swap at a DRC unit settles a thorny dispute with state miner Gecamines. But the $74 bln resources giant is no nearer to a deal on the country's burdensome new mining code. Heightened uncertainty over upcoming presidential elections only adds to the discomfort.

Chinese deal offers DRC miners a rare sign of hope

12 Jun 2018

State-backed CITIC has poured $560 mln into Robert Friedland’s Ivanhoe Mines. That is an unusual endorsement of the Democratic Republic of Congo, following a punitive new mining code. The move suggests a compromise is still likely, which would benefit Glencore and Randgold too.

M&A pause is promising for Wesfarmers investors

7 Jun 2018

The $39 billion Australian conglomerate is exiting British DIY and spinning off supermarkets. Newish boss Rob Scott is wary about future dealmaking. That is encouraging for shareholders: it makes more sense for now to work existing businesses harder and return more cash.

China’s Chile deal highlights a battery dilemma

16 May 2018

Tianqi Lithium is set to buy a stake in the $14.9 bln SQM. That suggests worries about excessive Beijing control over the key battery ingredient’s supply have eased. Still, the People's Republic would raise its share of output, hampering resource-rich nations’ scope to push back.

Glencore can dig its way out of Kinshasa quagmire

30 Apr 2018

A former partner is threatening to freeze two of the $71 bln commodity giant's operations in Congo, demanding $3 bln. It's the latest in a list of woes in the African country, including a tough new mining code. But the 6 pct drop in the stock over the past week is overblown.

Indonesia’s green ploy for copper raises red flag

25 Apr 2018

New environmental rules complicate and delay already tricky negotiations over control of Freeport-McMoRan's Grasberg mine. Cleaning up is a good thing, but the timing smacks of strong-arm tactics. It's a cautionary tale to foreign investors about an economy with so much appeal.

U.S. sanctions rethink is only partly reassuring

24 Apr 2018

A Treasury decision to delay the effects of sanctions on Rusal and allow it to disentangle itself from Oleg Deripaska has boosted the shares of the Russian group. But it leaves U.S. policy harder to gauge. That doesn’t augur well for next month’s crunch decision on Iran.

Russia’s banks could once more be its airbag

16 Apr 2018

The Kremlin has already authorised short-term liquidity to metals group Rusal. If the U.S. sanctions net gets cast wider, Moscow could use its control of the big Russian banks to prop up stricken companies. After all, that’s what it did when things last got dicey in 2014.

Opacity makes U.S. sanctions on Russia more potent

11 Apr 2018

Rusal aluminium will be barred from London’s Metal Exchange, and the Russian group and parent En+ will be deleted from some stock indices. In theory, non-Americans should be able to deal with both. But fear of how rules will be enforced is compounding the pain of tough sanctions.

Glencore’s Rusal cloud has a silver lining

9 Apr 2018

The commodity trader is nursing a hit to its 9 percent stake in the Russian miner, whose shares have halved due to U.S. sanctions. But the loss is bearable and disruption to the aluminium market and growing protectionism may end up helping CEO Ivan Glasenberg’s trading business.

Coal clearout puts Rio on path to greener deals

28 Mar 2018

The Anglo-Australian miner has raised $4.2 bln this month getting out of coal. That implies more buybacks and fewer environmental concerns, helping lift Rio Tinto’s modest valuation. It can also focus on future growth, including investments in battery ingredients like lithium.

Michelin’s $1.7 bln UK rubber deal stretches logic

20 Mar 2018

The French tyre maker is buying conveyor-belt group Fenner, whose clients include miners. Michelin should be able to flog more products in Asia and South America, and drive harder bargains with suppliers. Even then, it will struggle to earn an acceptable financial return.

Shell investors could live with a BHP shale punt

9 Mar 2018

The Anglo-Dutch oil major may bid with Blackstone for the miner’s $10 bln U.S. shale assets, Sky says. The business would be less risky for Shell’s balance sheet than drilling for traditional oil. And private equity’s high return targets could reduce the danger of overpaying.

Viewsroom: Trump slaps tariff fear on markets

8 Mar 2018

Imposing levies on steel and aluminum has lost the president his economic adviser, ex-Goldman No. 2 Gary Cohn. That has shocked investors out of complacency. Also: Italy’s elections leave fringe parties in charge. And big deals may be back on the agenda for the mining industry.

Congo digs deep hole with overhaul of mining law

8 Mar 2018

The world's top cobalt producer is right to update rules written after a ruinous war. But the dramatic shift to bring in more taxes also reneges on an earlier promised 10-year "stability clause". Unpredictable swings damage an already battered image, and put investment at risk.

Battery-powered IPO should be handled with care

2 Mar 2018

Ganfeng Lithium is coming late to the electric vehicle party. The Chinese miner and battery maker wants to raise at least $1 bln in Hong Kong as competition to make power cells intensifies and prices are peaking. Investors will want to know it isn't just cashing out at the top.

Miners face a multibillion-dollar growth debate

28 Feb 2018

The big diggers have emerged from 2017 in rude health: BHP, Rio and Glencore's combined net debt is down to a third of where they ended 2013. The challenge is how to go beyond better payouts. Geology and high prices mean the next phase of growth may be unorthodox.

Glencore is a weather vane for mining M&A

21 Feb 2018

The Swiss commodity group’s once-swollen net debt is below cash flow, but it will only decide later this year whether to hike dividends further. That leaves CEO Ivan Glasenberg scope to look for deals. If Glencore can’t find any decent ones, its peers probably won’t either.

Revived Santos can turn from prey to predator

21 Feb 2018

Full-year results show the $9 bln Australian gas producer is on the mend, with a narrowing net loss, less debt and more cash. That vindicates last year’s rejection of an opportunistic bid. The next challenge is shifting focus to growth - which could send Santos hunting for deals.