Mining

Credit Suisse has awkward role in Nat’s coal deal

14 Oct 2011

The bank is broker to Nat Rothschild’s mining vehicle, Bumi Plc, and lender and sometime adviser to his partners, Indonesia’s powerful Bakrie family. That’s a tricky position now the Bakries are scrambling to meet a margin call on a $1.3 bln loan - arranged by Credit Suisse.

Glencore resilience brings Xstrata deal closer

11 Oct 2011

Mining M&A’s clearest fantasy deal has inched closer to reality. A Glencore takeover of its $43 bln mining affiliate looks easier after the commodity trader’s shares held up better in the recent rout. But Xstrata investors are unlikely to roll over without a substantial premium.

Qatar steals $1 bln march on European Goldfields

3 Oct 2011

The Gulf country is hungry for exposure to gold. Its offer to finance a Greek mining project will secure it at least 27 pct of the Canadian group at a snip of its mooted July valuation. But in current markets, investors will have to think hard before turning away the Qataris.

It’s FTSE or bust for Russian miners in London

30 Sep 2011

Polymetal has become the latest to seek a full premium listing in London. The precious metals miner is upping its free float to get into the FTSE 100, expanding the universe of investors and boosting liquidity. It’s a reminder that the attractions of just listing GDRs are fading.

Ohio oil promises new bonanza for Texas bankers

7 Sep 2011

The first takeover deal in the Utica shale may be modest, but it’s only a start. Some $38 bln of shale-related deals this year account for 80 pct of U.S. exploration M&A. If Ohio’s rock formation yields even half its touted oil trove, energy financiers should be sitting pretty.

Gold miners no longer leveraged play on the metal

1 Sep 2011

The yellow metal’s price is up 29 pct in 2011, but mining shares are flat. Australia and Peru recently showed how governments grab more when prices rise; costs go up with prices, too. With mining investors also discounting price spikes, the shares aren’t shining for gold bugs.

Glencore share price recovery depends on M&A

25 Aug 2011

The commodity trader’s performance sagged slightly between Q1 and Q2. The business is coasting along, and the latest numbers were free of nasty surprises. But without an opportunistic acquisition, a recovery in the shares - still 25 pct below their issue price - will be a slog.

Rio shareholders get an extra thank you

4 Aug 2011

The miner needed a $15 bln cash call in the crisis. Now it’s raised its share buyback target by $2 bln to $7 bln. Given slightly disappointing H1 numbers and a global slowdown, that may seem imprudent. But the numbers add up. Rio can afford to repay investors their 2009 favour.

Prokhorov plays allotted role in Russian politics

29 Jul 2011

The billionaire has become the most prominent oligarch to enter politics since illfated oil magnate Mikhail Khodorkovsky. But the cases have little in common. Prokhorov is not opposing Russia's leaders, who may welcome him as a harmless alternative to more serious challenges.

Australia is the canary in China’s coalmine

19 Jul 2011

Chinese commodities demand created a mining boom, and turned Australia's credit market into a proxy for its trade partner's economy. That market is now flashing red for Australia's exposure to a Chinese slowdown. Even if China averts a dreaded hard landing, Australia may not.

BHP must drill deep to justify $12 bln shale deal

15 Jul 2011

U.S. shale is one area where mining giant BHP can buy without difficulty. Seller Petrohawk needed a partner to fund growth. But after paying a 65 pct premium for a recommendation, and with rivals keeping uneconomic projects humming, BHP won't earn a decent return for a while.

Peabody’s $5 bln coal bid re-run has better chance

11 Jul 2011

The U.S. energy firm's replay of last year's failed bid for Macarthur, the Aussie coal producer, is no more generous even though coal prices have risen. Peabody may have to sweeten the terms, but with key shareholder ArcelorMittal on side, the prize is in its sight.

Glencore move on ENRC would be logical but tricky

13 Jun 2011

The commodities trader would get instant heft in mining by buying ENRC and inexpensively, given the boardroom disarray that has hurt the Kazakh miner's shares. But the timing is bad, and adopting ENRC's assets and investors won't help Glencore win over the sceptics.

Kazakh mining spat leaves minorities in the cold

10 Jun 2011

ENRC has parted with two independent directors amid a bitter boardroom row. Standing up to the miner's controlling oligarchs may always have been an impossible task. It's a reminder of the perennial dangers of investing as a minority though index trackers have little choice.

Belarus plays potash trump card

9 Jun 2011

The cashstrapped country is in talks to sell 50 percent of potash producer Belaruskali to Suleiman Kerimov for $15 billion. A deal would allow the Russian oligarch to consolidate his already tightening grip on the global potash market at what looks like a steep price.

Barrick tries spinning copper into gold

25 Apr 2011

The Canadian firm jumped into the battle for copper miner Equinox, with a $7.7 bln bid that trumps one from China's Minmetals. It's a big premium from a company that mainly touts gold credentials. Barrick's shift as prices of both metals soar may not be the best use of resources.

Minmetals must work harder to win over Equinox

8 Apr 2011

The Chinese miner's $6.6 billion offer for Equinox looks better for the Australian copper producer than its planned bid for rival Lundin. But Equinox might be better still with no deal at all. If Minmetals wants to win out, it may need to offer 15 percent more, and quickly.

Minmetals road-tests new China M&A model

4 Apr 2011

With a rare combination of Western management and Beijingbacked financing, the Hong Kong listed miner has launched a $6.5 bln offer for Equinox Minerals. Time is short, and Minmetals may need to sweeten its bid to succeed, but it looks to have found a winning formula.

Brazil sends bad market signal scalping Vale’s CEO

1 Apr 2011

Roger Agnelli fought the state's designs to push the $180 bln mining giant into lowreturn, if laborintensive, businesses like steel production. With President Rousseff getting rid of him, investors must prepare for a strategy that favors jobs over profit more Pemex than BHP.

Rio right to play long game with Riversdale

29 Mar 2011

The AngloAustralian miner may fail to take control of coal specialist Riversdale with its $4 bln bid, and instead end up paying a premium for a minority stake. The path to a majority may not be smooth. But the investment still makes sense, and Rio can afford to take it slow.