Mining

Rio’s Mongolian buyout saga has further chapters

13 Sep 2022

Some investors in Turquoise Hill Resources, which owns 66% of the huge Oyu Tolgoi copper project, have spurned the $97 bln miner’s latest pitch. Rio Tinto’s offer is much improved, and backed by the Turquoise board. But minorities have some grounds to hold out for yet more.

Capital Calls: Amazon’s green coupons, Peloton

25 Aug 2022

Concise views on global finance: The internet giant’s promise to try green hydrogen technology is valuable to firms like Plug Power, so Amazon demands a taste. Investors in the exercise-bike maker suffer a rapid descent after dismal fourth-quarter earnings.

Rio minorities’ bet is far from copper-bottomed

15 Aug 2022

Investors who hold the 49% of Turquoise Hill Resources not owned by the mining giant have spurned a $2.7 bln offer to buy them out. True, copper prices could rebound and hike the value of their giant Mongolian copper mine. But Turquoise’s minorities may need a deal more than Rio.

BHP’s metals deal could use some schmuck insurance

8 Aug 2022

CEO Mike Henry’s rebuffed $5.8 bln bid for OZ Minerals pits a mining giant trying to bulk up on nickel and copper, vital to electric cars, against a scrappier rival. Offering performance payouts on top of a premium would help address both sides’ risk and reward calculations.

Capital Calls: Spotify hums along

27 Jul 2022

Concise views on global finance: The music service led by Daniel Ek added more subscribers and revenue in the quarter outperforming Netflix and Twitter.

Santos throws down M&A cost-cutting gauntlet

22 Jul 2022

The $17 bln fossil-gas giant took just six months to deliver promised savings from acquiring Oil Search. That handily beats the 18-month timeframe advocated by McKinsey, and embarrasses ANZ’s six-year timetable for its Suncorp deal. CEO Kevin Gallagher has raised the synergy bar.

War helps Russian nickel king expand his realm

5 Jul 2022

Tycoon Vladimir Potanin may merge Norilsk Nickel with aluminium maker Rusal. The West would be extra wary of sanctioning such a giant for fear of roiling metals markets. The pair may have some synergies, but their two main owners don’t get on. It would be a governance nightmare.

Lithium landgrab sparks new electric-car risk

24 Jun 2022

Tesla, Stellantis and others want to lock in long-term supplies of the battery component. Elon Musk might even try mining it. Such steps are enticing after the metal’s price rose tenfold in two years. But deals struck under duress can be a shock to the system down the road.

Gold Fields shells out to beat the ageing process

31 May 2022

The Johannesburg miner is buying Canada’s Yamana in a $6.7 bln all-share deal, creating the world’s fourth-biggest bullion producer. Scant cost savings don’t justify the premium. Given his middle-aged mines, CEO Chris Griffith has little option but a target with a longer future.

Capital Calls: Airbnb, Prudential, Glencore

25 May 2022

Concise views on global finance: The $68 bln vacation-booking platform will shut its Chinese business; the insurer appoints a new CEO – finally; the commodities giant has a $10 bln reason to keep its nose clean, after a $1.5 bln settlement for corruption allegations.

Review: Pandering to Beijing has shrinking payback

1 Apr 2022

One difference between the Cold War and current Sino-U.S. tensions is the crowd of capitalists rooting for the communists. In “America Second,” Isaac Stone Fish lambasts the CEOs and lobbyists who take China’s side. Yet the return on sucking up, never high, is falling sharply.

AMC’s diversification is anything but golden

15 Mar 2022

The $7 bln theater chain is taking a 22% stake in gold miner Hycroft. The main thing the companies share is a relationship with investor Mudrick. AMC could use a revamp and creative solutions might work. But an idea so outlandish undermines other more plausible possibilities.

Rio’s Mongolian generosity reflects strategic bind

14 Mar 2022

The $120 bln miner has offered $2.7 bln to buy out minority investors in Turquoise Hill, which controls the giant Oyu Tolgoi copper mine. Rio Tinto could have paid less last year. But its lack of metals needed for alternative energy makes it vital to remove any future barriers.

Glencore is gaining ground on its trust issues

15 Feb 2022

The $77 bln commodity giant has set aside $1.5 bln to settle graft probes. That’s better than feared. And an improving valuation suggests investors are less bothered about its desire to stick with coal. But the mineral remains sufficiently controversial to check further upside.

BHP’s deal willpower put to ultimate test

15 Feb 2022

A record $7.6 bln interim dividend speaks to the miner’s rude health. Boss Mike Henry sees opportunities from inflation and less risk in China. His confidence and a simplified share structure make capital discipline even harder in the quest to bulk up on energy-transition metals.

Rio’s culture rot puts investors on the spot, too

14 Feb 2022

The miner’s endemic racism, sexism and bullying is a wider wake-up call. Shareholders tend only to push firms for board diversity and equal pay. Yet a dysfunctional workplace runs deeper, affecting earnings and even M&A. It’s time social failings got some climate-style activism.

Rio Tinto’s cultural fix will be an uphill dig

2 Feb 2022

The $117 bln mining giant is rife with bullying and racial and sexual abuse, according to a damning report. Miners’ improved safety records show reform is possible, if hard. Investors’ apparent indifference, though, makes prioritising workplace respect even tougher.

New backer would fuel Aussie hydrogen hype machine

25 Jan 2022

Fortescue’s ambitious plans to use the gas for renewable energy help it trade at a premium to mining peers. Scant detail raises concerns, however. Chair Andrew Forrest could ease them by selling a stake in the FFI green unit, as GM and Ford did with their self-driving outfits.

Serbia’s Rio smash dents EU electric-car dream

21 Jan 2022

The Balkan state nixed the $120 bln miner’s lithium project on environmental grounds. A looming election and spat over tennis ace Novak Djokovic didn’t help. Belgrade’s status as an investment destination is at stake. So are European hopes for reliable local battery ingredients.

Kazakh oligarch shakeup may give foreigners a shot

12 Jan 2022

President Tokayev needs to consolidate power after unrest and raise cash to placate his citizens. Billionaires allied to his predecessor are obvious targets. Since he lacks a go-to gang to take over mining assets, he may favour gradual redistribution and more external investment.