Mining

Chinalco looks set to mine Rio Tinto

2 Feb 2009

The Chinese stateowned aluminium producer could help the AngloAustralian miner reduce its $39bn debt burden and dodge a rights issue. But with Chinalco already sitting on a $10bn loss, Rio might have to offer a sweetheart deal. Other shareholders could find that less appealing.

BNP-Fortis saga nears acceptable compromise

30 Jan 2009

The botched sale sank Belgium s government and infuriated Fortis shareholders. A new proposal allows smarting investors to keep most of their insurance arm and reduce exposure to toxic assets. A weakened BNP will be happy to save cash and get Fortis s retail arm.

Xstrata jumps queue with $6bn rights issue

29 Jan 2009

The once acquisitive Xstrata has too much debt for these times. It is pricing its issue at a hefty 66% discount to get it away. And its largest shareholder, metals trader Glencore, is providing assets rather than cash. As rival Rio mulls its options, the cash rush has begun.

Rio Tinto grasps nettle on $39bn debt pile

10 Dec 2008

As with all nettles, there s a sting. The miner is gouging capex, hacking its workforce, and capping the dividend to save around $6.5bn next year. Rio has probably done enough to allay fears of a cash crunch but there s loads more pain ahead.

Rio Tinto’s board deserves some slack

27 Nov 2008

BHP Billiton's failed offer for the AngloAustralian miner leaves Rio's share price in tatters, but shareholders shouldn't blame Rio s resistance. A tieup probably wasn't deliverable. If Rio's board had caved in, there could have been in a painful mess.

Kremlin takes over at Norilsk

26 Nov 2008

The Russian government has imposed a truce and will call the shots at the world s largest nickel company, torn by a feud between two oligarchs. This should allow Norilsk to focus on shrinking markets and falling prices. But minority investors have no reason to cheer.

China feels aftershock of Rio Tinto bid collapse

26 Nov 2008

Chinalco, the Chinese miner, is nursing huge paper losses on its stake in Rio Tinto. But China Development Bank, which lent Chinalco $8bn against assets now worth $3bn, may pick up the tab. It s bad timing for an institution central to China s economic stimulus plan.

BHP’s about-face leaves Rio Tinto stranded

25 Nov 2008

The implosion of BHP Billiton's allstock offer for the rival miner leaves both sides redfaced. But Rio is groaning under a $38bn mountain of debt, its share price in tatters. By leaving its rival in such a tough spot, BHP may have scored a sort of victory after all.

BHP-Rio bid failure may be a happy mistake

25 Nov 2008

Rio s board looks remiss for not accepting an allshare offer when it had the chance. BHP s board looks foolish for its hubris. But given the problems a merger would have created among customers and lenders, these failings may be a blessing in disguise.

Carlyle’s exit snag underlines credit crunch lesson

17 Nov 2008

The buyout firm is suing Russia s Novolipetsk Steel for walking away from a deal to buy John Maneely. Buyout firms know the broken deals game well, often from the other side. Like recipients of LBO offers, private equity firms should stresstest their buyers.

Kremlin gets its pound of flesh from Deripaska

6 Nov 2008

The Russian government bailed out Oleg Deripaska, owner of aluminium maker Rusal, so he could keep 25% of Norilsk Nickel, which a rival oligarch controls. In exchange, it will appoint a director and two managers at the world s largest nickel producer and call the shots.

Zhevago’s forced asset sale is ominous for miners

6 Oct 2008

Kostyantin Zhevago, Ukrainian billionaire and owner of miner Ferrexpo, dumped his stock and took a 30% hit to meet a margin call on a loan. It s not just that he was highly leveraged. The dramatic fall in metals prices means harder times for the mining sector.

Xstrata’s long game puts squeeze on Lonmin

10 Sep 2008

The metals giant has an 11% stake in the UK platinum miner and an option to formalise its hostile bid. The longer it waits, the more Lonmin s shares seem to slide. Xstrata can almost certainly afford to pay more but the chances of it doing so are receding.

Lonmin shareholders fire first shots in defence

8 Aug 2008

The UK miner s biggest shareholder, M&G, has refused to sell its 17% stake to raider Xstrata. Lonmin s board has yet to produce much of a defence. Investor holdouts look to be the company s best chance of winning a higher offer.

Xstrata plays rough with $10bn Lonmin bid

6 Aug 2008

The metals giant has bypassed the platinum miner s board with a hostile cash bid, and a dawn raid to boot. The scarcity of Lonmin s assets and its depressed shares explain the aggressive approach and its timing. Lonmin will struggle to repel this assault.

ArcelorMittal shows why size pays in metals

30 Jul 2008

The steel giant produced an astonishing $8bn of ebitda in Q2. That's not just because China is crunching through the stuff. ArcelorMittal is still squeezing yet more synergies from its two year old union. That won t have escaped other mergerminded metals giants.

Why oligarchs love a London listing

16 Jul 2008

The Russian billionaires who built up giant companies in the freeforall days want to consolidate and tap western capital markets. They hope this will bring them respectability. But serious governance problems and the Russian government s protectionism are in their way.

Norilsk Nickel could benefit from oligarch stand-off

1 Jul 2008

Vladimir Potanin and Oleg Deripaska, who are fighting for control of the world s largest nickel producer, have placed their candidates on the company s board. But Norilsk s two independent directors will determine its future provided one of them becomes chairman.

Mittal shows faith in customer power

30 Jun 2008

The Indian magnate s steel firm has built a 20% stake in Australia s Macarthur Coal. That looks wise. Even without a full takeover, holding sway at firms where you re a big customer has value. That might also explain Mittal s new board seat at trusted advisor, Goldman Sachs.

Oligarchs ready for showdown at Norilsk Nickel

18 Jun 2008

Two Russian billionaires Oleg Deripaska and Vladimir Potanin are fighting for control of the world s top nickel producer. Norilsk s standalone days seem to be over, but the two have different plans. It s an important argument, but minority shareholders are excluded.