Mining

Gulf buyer is best hope to revive De Beers sparkle

16 May 2024

Anglo American wants to offload its diamonds group. Hit by cheaper lab-grown gems and falling demand, De Beers will struggle to attract a luxury buyer. A rich Middle East suitor looks the most plausible way to avoid a sale at well below its $7.6 bln book value, or a mere spinoff.

Anglo breakup gives investors a free option on M&A

14 May 2024

The $40 bln miner plans to offload coal, diamond, nickel and platinum assets to help fend off takeover interest from BHP. The standalone strategy may be worth more to shareholders than what its Australian suitor proposed. Yet if it flops, a future takeover might be even easier.

BHP-Anglo impasse more about structure than price

13 May 2024

Anglo American spurned an improved $43 bln bid from its Australian rival. A key obstacle is that BHP wants its target’s investors to bear the risks attached to spinning off unwanted South African units. CEO Mike Henry can remove it by making an offer for the whole company.

Rio Tinto may be dark horse in BHP-Anglo saga

10 May 2024

The $120 bln miner may yet crash the Big Australian’s $39 bln merger. Still, if BHP does win Anglo and Glencore is busy integrating its $7 bln Teck deal, Rio’s key mining rivals will be distracted. That may give CEO Jakob Stausholm a clearer run at the likes of First Quantum.

BHP bombshell puts South African mining in a hole

6 May 2024

The Australian miner’s $39 bln tilt at Anglo American highlights the decline of the country’s once-mighty industry. Blocking the deal would send an even worse signal about South Africa as an investment destination. Pretoria would do better to push for a more acceptable outcome.

Clash of the mining titans will get more bruising

2 May 2024

Australian giant BHP’s $39 bln swing for Anglo American is a contentious, complex land grab for the metals key to a renewable future. In this Viewsroom podcast, Breakingviews columnists discuss the political and financial hurdles, and why this M&A contest has a way to run.

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.

China can stay on sidelines in BHP-Anglo battle

30 Apr 2024

The People’s Republic may not kick up a stink about a merger like it did with the Aussie miner’s 2008 Rio tilt. Suppliers of copper are more fragmented than those of iron ore, Beijing’s M&A interventionism has matured, and friends like South Africa can lead any deal opposition.

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.

BHP CEO tests his M&A promise in Anglo American

25 Apr 2024

Mike Henry has long sworn off overpaying for deals. A 30% premium for its $37 bln smaller rival looks justifiable. The buyer would then become the world’s largest copper miner and gain better iron ore for green steel. The real trial will come if peers like Rio join the fray.

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.

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.

Andrew Forrest can do no wrong

23 Feb 2024

Shares in Fortescue, the miner he founded, are up 43% from their September low, besting BHP and Rio. Avoiding the nickel and aluminium slumps helps, as does low debt. But exec churn, iron ore volatility and its green energy unit's investment needs warrant shareholder caution.

 

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.

Battery minerals pressure causes cracks Down Under

31 Jan 2024

Miner IGO is freezing a nickel project key to a near-$1 bln acquisition just 18 months ago. It’s also having trouble selling lithium. Falling commodity prices and slowing EV growth are proving problematic for many, including BHP. But bad dealmaking has compounded IGO’s pain.

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.

Iron ore investors mine irrational exuberance

16 Jan 2024

The mineral's recent 40% jump has sent BHP, Fortescue and Rio's Aussie-listed shares towards record highs. Yet the trio's earnings are below their peak, as is the commodity, whose price is expected to fall. Absent a sudden upswing in China's economy, the rally looks overdone.