Mining

Bumi offers ticket to ride Asia’s coal-fired rise

10 Mar 2011

The Indonesian miner's fortunes rest on growth in China and India. Both are switching to cleaner fuels, but soaring demand requires imports and Bumi is the biggest producer in the world's largest exporter. Its London listing should also ease past concerns about murky accounting.

New Xstrata chairman sends the right message

7 Mar 2011

John Bond has clashed with investors in the past. But his impending appointment as chairman of Xstrata suggests the miner is ready to protect minority investors in any deal with peer and top shareholder Glencore. Bond's skills as a shareholder champion could face an early test.

Copper fight highlights merger of equals flaw

28 Feb 2011

Lundin and Inmet wanted a quiet, nopremium marriage. Now a third copper miner, Equinox Minerals, has thrown in a $5 bln hostile bid for Lundin at a 26 pct premium. One message is that mergers of equals are usually copouts that can be easily trumped.

Aborted deals not always bad for target holders

21 Feb 2011

Take Potash Corp. Canada's blocking of BHP's $39 bln bid in November made the company takeoverproof. Normally that would cost shareholders. Yet it now trades 42 pct above BHP's bid price. The offer was low but the politicians also helped save investors from themselves.

Is this as good as it gets for big mining?

16 Feb 2011

BHP and Rio have doubled earnings over three years thanks to skyhigh metals prices, notably iron ore. They are skimming off cyclical froth with $15 bln of buybacks, while scaling back M&A to focus on capex and organic growth. It looks like they're preparing for the turn.

Deripaska may not refuse new Norilsk buyout offer

14 Feb 2011

An end may be in sight for the dispute at Norilsk Nickel. The Russian miner has upped its offer to buy out the RUSAL aluminium group, offering $12.8 billion for 20 percent of Norilsk. Even RUSAL's stubborn owner Oleg Deripaska should be tempted by the generous 40 percent premium.

TMX deal could test Canadian capitalist bona fides

9 Feb 2011

A sortof merger of equals with the London exchange makes sense as a global megabourse for metals and mining. But with no premium, interlopers from New York, Chicago and Asia still have a chance to woo TMX shareholders leaving Ottawa to cast the deciding vote. Potash anyone?

Court ruling gives Deripaska a chance at Norilsk

8 Feb 2011

A West Indies court says that the Russian nickel group can't vote or sell treasury shares held by its offshore subsidiaries. This gives aluminium oligarch Oleg Deripaska a chance to convince minority investors to back him and fire Norilsk's board. But he faces an uphill struggle.

Alpha generously rescues wounded Massey

31 Jan 2011

For a firm hobbled by the worst mining accident in decades, Massey has pulled off a coup with a $7.1 bln sale to its rival. The companies fit well together and should be strong in the redhot market for steelmaking coal. But the synergies don't fully justify Alpha's fat premium.

Nord Gold shoots high with valuation hopes

27 Jan 2011

Russia's Severstal hopes its gold mining business will be worth as much as $5.1 billion in a London IPO. Nord Gold's diversification and production growth look good relative to UKlisted rivals. But the value of a large subsidiary suggests the price tag is punchy.

Norilsk’s dividend slash shows Deripaska the exit

20 Jan 2011

The Russian nickel miner may not pay a dividend this year, even as it spends $4.5 billion on share buybacks. This puts further pressure on RUSAL, the aluminium giant, to sell Norilsk its 25 percent stake in the group. RUSAL's owner Oleg Deripaska may soon have no other choice.

Miners may shoulder some cost of Australian floods

12 Jan 2011

The commercial hit from the Queensland floods may be quite manageable. Government finances are strong and while coal production has suffered, higher prices offer some consolation. But extra pressure on the public purse may bring new support for the hated mining profit tax.

Comeback kid Anadarko still makes a risky target

5 Jan 2011

BP's unlucky silent partner in its Gulf spill has staged a remarkable bounce. Discoveries from Mozambique to Brazil, along with takeover talk, have returned the explorer's shares to preaccident levels. Yet the $37 bln firm's unknown liability still makes it slippery prey.

Aussie two-speed economy drives two-speed M&A

23 Dec 2010

It feels like 2007 again, with hot commodity prices fuelling deal after deal, the latest being Rio's $3.9 bln bid for Riversdale. Mining M&A has found finance; foreign buyers are unfazed by the strong Aussie dollar. ASX and Fosters aside, other sectors may get left in the shade.

Norilsk war better than tentative peace dividends

20 Dec 2010

Investors are disappointed by RUSAL's rejection of a $12 billion Norilsk offer to buy its stake in the nickel group. But this may be a blessing in disguise. The shareholder dispute is not all bad. A deal would have saddled Norilsk with debt and entrenched management control.

Vallar is set for an impressive return

9 Dec 2010

There is a good chance that investors in Vallar, the mining newcomer fronted by Nat Rothschild, will enjoy a tidy payday when trading in shares in the company restarts. Judging by the current market value of what it's buying, a 12 percent jump is in order.

Rio is right to explore $3.5 bln Mozambique option

6 Dec 2010

The UK miner is mulling a bid for Australian miner Riversdale, a deal that would give access to billions of tonnes of coal in Mozambique. It seems speculative, and the market is pushing the price up against Rio. But if the asset delivers, this could end up looking like a bargain.

Rio Tinto’s China deal a big win – for China

3 Dec 2010

The UK miner is teaming up with top customer and shareholder Chinalco to explore Chinese mineral reserves. It's a pioneering deal. Being first has option value for Rio. But by putting people and assets in the Middle Kingdom, Rio's giving the Chinese miner a new kind of leverage.

Miners still need to plant their flags in London

19 Nov 2010

Resources companies are eyeing the east for listings, where demand for their goods resides. Larger firms like Glencore may put feet in more than one camp, yet on the three things that count liquidity, information and corporate governance London is still far ahead.

Caterpillar mines synergy gold in Bucyrus deal

15 Nov 2010

The earthmoving giant agreed to buy the mining equipment manufacturer for $7.6 bln or five times its 2004 IPO price. While hefty, the cost savings that Caterpillar is promising to harvest are worth at least 25 percent more than the $1.8 billion premium it s paying.