Mining

Rio and BHP steel themselves to abandon JV

15 Sep 2010

Pooling the riches of Australia's western desert, currently split between Rio and BHP, would give the duo world dominance in iron ore. But they've asked the Aussie authorities to postpone a decision yet again. The deal is on the rocks. Still, there should be relief all round.

China needs right ingredients for Potash bid

9 Sep 2010

A Chinese counter to BHP Billiton's $39 bln bid for the Canadian fertiliser maker depends on getting the right ingredients. Singapore's Temasek may be able to help with some of them, if it can get a sweet deal. Meanwhile, China's scarcest asset may be time.

Russian potash not a one-way bet

8 Sep 2010

Rio Tinto may be mulling an investment in the Russian potash group Uralkali. With 22 percent of world potash reserves and proximity to key markets, Russia is well positioned to tap rising fertiliser demand. But the changing global market structure poses risks.

Gillard win turns thumbscrews on miners

7 Sep 2010

The Australian PM hung on to power by her fingernails, making her tax on miners' profits more likely. How hard and widely it hits hinges on yet more horsetrading. But Rio Tinto and BHP Billiton can probably forget hopes of returning to the superprofitable status quo.

BHP’s Kloppers can afford Potash Corp failure

6 Sep 2010

The miner's CEO has put his reputation on the line by launching one of the industry's biggest takeovers in a decade. His two previous M&A attempts haven't come to much. But aborted tieups are common in the sector. Kloppers could survive a failed deal more easily than overpaying.

Sinochem could struggle to frustrate Potash bid

2 Sep 2010

Intervening in the battle for control of the Canadian fertiliser group would fit with the stateowned firm's aim to be a mainstay for China's agricultural safety. Financing won't be a barrier. But Sinochem will face other hurdles if it wants to block BHP Billiton's $39 bln bid.

China antitrust scrutiny no trifle for BHP/Potash

1 Sep 2010

The idea that China may probe BHP's $39 bln bid for the Canadian fertilizer maker sounds odd, as the miner's proposed deal wouldn't concentrate the market. But the young antitrust regime has bent logic before. And while Beijing can't nab BHP assets, it can curb its opportunities.

Deripaska will struggle to keep a hand in Norilsk

1 Sep 2010

The oligarch has suffered a setback in his row with the Russian nickel miner, after Vladimir Putin rejected his criticisms of Norilsk's dividend policy. Without political support, Deripaska may be better selling the 25 pct stake held through debtridden aluminium giant Rusal.

BHP bid should sail through Canada’s regulators

26 Aug 2010

Foreign buyers must prove a deal will be a net benefit to the country. The Australian miner's pursuit of Potash Corp should easily pass that test. And national security isn't an issue. Canadians might not like losing another top company. But there's no reason to prevent it.

BHP takeover would upset cozy potash market

25 Aug 2010

Potash Corp's size means its production can affect fertilizer prices. If BHP succeeds with its $39 bln takeover bid, it promises to run Potash mines at full capacity. That probably would help farmers, at least in the short term, and hurt highcost producers like K+S and Intrepid.

Potash CEO’s big payday won’t decide the deal

25 Aug 2010

A $500 mln check would normally sway the minds of most mortals. But Potash CEO Bill Doyle has sat on larger sums before and held tight. With his golden parachute just 6 pct of the payoff, he has no obvious incentive to shortchange shareholders with a quick flip of the firm.

Aussie election stalemate leaves miners in dark

23 Aug 2010

The country's economic health means a hung parliament shouldn't frighten markets. The biggest bargaining chip in the battle to court independent lawmakers could be the fate of the proposed supertax on miners' profits. Sadly, the levy may not survive the political horsetrading.

BHP’s Kloppers learns from past failures

20 Aug 2010

The mining chief's last big attempted deal with Rio Tinto fell flat. That raises the stakes for his $39 bln bid for Potash Corp. BHP's latest target involves less regulatory risk and should not offend customers as much. Yet the hostile tone suggests familiar tactics.

Mining deals show M&A funding market is open again

18 Aug 2010

Banks have lent acquisitive miners more than $50 bln in the past week. With bond markets healthy, lenders may be expecting much of this to be quickly refinanced. Nevertheless, the ready supply of funding for big, risky deals shows the appetite for M&A lending is back.

BHP-Rio JV may need big remedies to get through

9 Aug 2010

The mining industry is facing unprecedented scrutiny. That means BHP and Rio may find it harder to get their Aussie iron ore tieup cleared than if they'd tried two years ago. Regulators could potentially demand the sale of assets worth $8 bln but that needn't kill the deal.

BP snap-back could have further to run

5 Aug 2010

Obama has softened his tone, the environmental damage is less than feared, the spill has been quantified and the well is almost permanently plugged. There's probably more upside in the shares so long as BP doesn't get hit for gross negligence.

Slow recovery will test ArcelorMittal targets

28 Jul 2010

An economic slowdown in China and slowerthanexpected global steel restocking cycle will translate into a gloomy second half for the steelmaker and economic bellwether. ArcelorMittal's previous forecast of 10 pct growth in world steel demand in 2010 may now be a close call.

BP tries slimming back to health

27 Jul 2010

The UK oil major is upping its disposal programme to $30 bln and cutting debt after taking a $32 bln hit on the Gulf spill and changing CEO. Like a wounded bank, BP is kitchen sinking and wants maximum financial strength. But there's still much risk and uncertainty to the plan.

BP should give Hayward his financial dues

26 Jul 2010

There could be outcry in the U.S. at an eightfigure golden goodbye for the departing BP boss. But this is mainly accrued pension rights over Hayward's three decade career. That is Hayward's contractual entitlement. BP should have no hesitation in honouring this.

Latest punishment could get BP some sympathy

15 Jul 2010

A U.S. legislative proposal to ban drilling by oil groups with bad safety records looks tailormade for BP. More safeguards are warranted in the aftermath of the Gulf spill. But this idea could compromise the rule of law and make it easier for the UK oil giant to marshal support.