Mining

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.

Capital Calls: Anglo American

8 Dec 2023

Concise views on global finance: After a rough year the $34 bln miner is to cut spending, but its plans are yet to include an exit from coking coal.

Glencore’s split is yet to be copper-bottomed

6 Dec 2023

Having merged its coal assets with Canadian miner Teck’s, the $70 bln Swiss group is eyeing a spinoff. But boss Gary Nagle faces a tricky call on what to do with oil trading. And the appeal of a coal-clean metals split may hinge on whether Teck’s own separation creates value.

Glencore deal is necessary detour on breakup path

14 Nov 2023

CEO Gary Nagle is buying 77% of Teck Resources’ coal arm for $6.9 bln as a prelude to a dirty-fuel spinoff. It’ll backfire if prices fall or authorities intervene. But it’s worthwhile given the reasonable valuation and chance to build a more appealing coal unit for investors.

Uncle Sam provides shaky base for Caterpillar

31 Oct 2023

The equipment maker beat third-quarter profit forecasts with help from Washington’s infrastructure bill. Yet half of the $550 bln package has been spent, and Caterpillar’s backlog is shrinking. Like other government-supported spending, federal aid can only help for so long.

Capital Calls: McDonald’s resilience

30 Oct 2023

Concise views on global finance: The Golden Arches’ global same-store sales rose 9% thanks to both selective menu-price increases and smaller meals in different markets. It demonstrates the company’s ability to keep pace with disparate economies’ stretched consumers.

Tycoon’s lithium grab leaves investors hanging

16 Oct 2023

Billionaire Gina Rinehart has stifled Albemarle’s $4.2 bln bid for Liontown with deft use of Australia’s takeover rules. Now the minerals producer has to raise cash just as prices for the key battery material are falling. She needs to show why her spoiling tactics were worth it.

Asia’s breakup party is happening under duress

4 Oct 2023

India’s Anil Agarwal is splitting his $10 bln mining company Vedanta into six. As with China’s Alibaba, the carve-up is spurred by external problems, namely debt at its unlisted parent. Tycoons are unlocking value for weary shareholders, but mostly because they have no choice.

Lithium merger is charged up by tycoon fever

27 Sep 2023

Gina Rinehart, Australia’s richest person, has bought 11% of Liontown, which is sizing up a $4 bln takeover by Albemarle. Whether she makes a full bid or not, she’s only the latest mining billionaire forcing a strategic buyer to dig deeper for an energy transition commodity.

M&A spillover in India-Canada fight hurts everyone

22 Sep 2023

As bilateral relations sour over a murder, tycoon Sajjan Jindal is going slow on his planned $8 bln consortium bid led by JSW Steel for Vancouver-based Teck’s coal assets. The stalling hurts the buyer and the seller, and India’s diversification ambitions a bit more.

Fortescue founder toys with reverse greenwashing

1 Sep 2023

Andrew Forrest has lost a CEO, a CFO and a top adviser this week. The tycoon says people only quit his $43 bln miner if they disagree with its zero emissions goal. Change and the energy transition can be disruptive. But his absolutist twist to climate spin homes in on a new risk.

Fortescue’s biggest problem sits at the top

28 Aug 2023

The $41 bln Australian iron ore miner is parting ways with CEO Fiona Hick after six months. Hers is the latest in a slew of senior departures that reflect poorly on founder and chair Andrew Forrest. Shareholders can accept he’s becoming a liability, push for his removal, or sell.