Mining

South Africa enters greener bond-market crosshairs

11 Mar 2021

With 90% of its power coming from coal, the Rainbow Nation is one of the worst CO2 emitters. Mining’s political heft also means foot-dragging on climate policy. With big external funding needs, the kick from bond investors when they flick the green switch will hurt hardest.

Capital Calls: OPEC+, Michaels

4 Mar 2021

Concise views on global finance in the Covid-19 era: Recovery concerns keep a lid on the oil cartel’s supply taps; Apollo tries its hand at craft retailer Michaels.

Rio can use sunny outlook to mend leaky roof

17 Feb 2021

Jakob Stausholm’s first results benefitted from soaring iron ore prices, allowing the global miner’s new CEO to hike dividends. But he has a messy situation in Mongolia to resolve, and governance issues. Better to spend time and money fixing these than on splashy new deals.

Coal wobble flags Glencore’s green high-wire act

16 Feb 2021

The commodity giant’s EBITDA from the black stuff collapsed in 2020 to just $1.2 bln. Given his increasing climate consciousness, departing CEO Ivan Glasenberg should be happy. But it also shows the risks of a green pivot that requires coal to be used as a financing bridge.

BHP boss gets extended Chinese honeymoon

16 Feb 2021

Covid-19 infected Mike Henry’s first year as the miner’s CEO, but high iron ore prices driven by demand from the People’s Republic just paid for a record $5.1 bln dividend. They also buy him extra time to grapple with a dual listing, potash plans and Beijing’s ban on Aussie coal.

Anglo takes quick, dirty route to greener pastures

8 Feb 2021

The miner may dump its African coal unit, worth maybe $1 bln. A spinoff could add six times that sum to the $45 bln group’s value by luring eco-conscious investors. Yet it doesn’t cut global emissions, and Anglo American’s iron ore assets may soon feel the environmental heat.

Kaz Minerals minorities should quit while ahead

4 Feb 2021

The copper miner’s two biggest investors have increased their takeover bid to 3.7 bln pounds. The new offer is still not exactly a knockout, but Kaz Minerals warrants a discount given much of its value is tied up in one risky project. Minorities should take what’s on the table.

BHP’s dual-listing dilemma gets ESG nudge

3 Feb 2021

The spread between the $160 bln miner’s Aussie and UK shares is at its highest since 2011. Tax perks mean the equity Down Under should trade at a premium, but distaste for fossil fuels among British funds is helping widen the gap. It’s time to reconsider collapsing the structure.

Glencore unearths copper-bottomed Zambian lifeboat

19 Jan 2021

The miner is exiting the African state by lending it $1.5 bln to buy its Mopani stake. Linking repayment to the mine’s future copper revenue cuts Glencore’s risk. Lusaka’s bulging debt pile, and its history of disastrous state ownership, gives taxpayers less reason to celebrate.

New Rio Tinto boss has Mongolian bullet to bite

18 Jan 2021

Atop Jakob Stausholm’s to-do list is sorting out the miner’s troubled $10 bln Oyu Tolgoi copper project. Satisfying Ulaanbaatar, pushy hedge funds and minority shareholders at once will be impossible. Raising equity and reworking a sticky loan structure are the least-bad options.

Rio’s new CEO reflects its lack of wiggle room

17 Dec 2020

Finance director Jakob Stausholm is the surprise choice to lead the $126 bln miner. Rio’s self-imposed difficulties in Mongolia and Australia meant an outsider might have been preferable. But given Rio may feel the need to soon replace its chairman, continuity is also important.

Rio Tinto’s CEO search just got even harder

10 Dec 2020

A scathing government report over the Australian miner’s destruction of Aboriginal sites calls for sweeping changes. It portends a long slog to repair the $120 bln company’s reputation. Corporate governance and climate issues add to the daunting challenges concerning growth.

Hitachi unit buyout requires steely resolve

8 Dec 2020

KKR and Bain are among the suitors for the Japanese conglomerate’s $6 bln metals business. The company has fallen on especially hard times during the pandemic. It will take a big recovery and then some to generate a healthy return on the deal. A carve-up may even be in order.

Mining deal explores Sino-Australian common ground

8 Dec 2020

Perth-based IGO is in talks to buy a minority stake in a Tianqi Lithium mine for $1.5 bln. The Chinese company could use the money to cover $1.9 bln of debt from its investment in Chile’s SQM. It also would be welcome cooperation amid heated tensions between the two countries.

Glasenberg-less Glencore is surprise green champ

4 Dec 2020

Gary Nagle is the miner’s new CEO. The South African inherits a different firm to the one compatriot Ivan Glasenberg led. Running down coal mines to hit zero CO2 emissions by 2050 and boosting copper and cobalt pitches Glencore as an unlikely centrepiece of the green transition.

Stingy copper buyout may tarnish Kazakh listings

17 Nov 2020

Two shareholders of 3 bln pound miner Kaz Minerals want to take it private. The offer looks low and premature, given uncertainty over the prospects of the Eurasian group’s biggest asset. An opportunistic takeover may further dent London’s appetite for companies from the region.

Kazakh copper takeover looks opportunistic

28 Oct 2020

Kaz Minerals’ chairman and its biggest shareholder are offering 3 bln pounds for the London-listed miner. It’s a tiny 12% premium and selling now would mean missing out on the gains from a battery-powered boom. But with little hope for a rival deal, investors may still accept it.

Corona Capital: U.S. tests, UK loans, Man U groans

21 Oct 2020

Concise views on the pandemic’s corporate and financial fallout: Abbott Laboratories has a bumper third quarter; UK banks look at a workaround for their Covid-19 loan problem; and Manchester United reveals a predictably ropey set of annual results.

Vedanta’s failed buyout is Agarwal’s comeuppance

12 Oct 2020

The indebted tycoon’s effort to take private his $5 bln Mumbai company has backfired. Technical glitches compounded a quirky delisting process that empowers minority investors. After years of Agarwal’s opportunistic toying with the stock market, shareholders have the upper hand.

Aussie gold miners make deal wishes come true

6 Oct 2020

Northern Star is acquiring smaller rival Saracen for $4.1 bln. They’ll share a heap of promised synergies without a premium to pay for using a structure touted by an industry shareholder group. The buyer’s track record also should mitigate some typical merger concerns.