Rosneft will supply 80K metric tons of oil via the Druzhba pipeline to each of the countries this month, while supplies will total 500K during the January-March period, according to the report, which cites trading sources.
Rosneft has been supplying oil through Druzhba to Poland, Germany and the Czech Republic.
The loan was a stopgap until other financing was put in place but the undisclosed role played by the state-owned bank in the complex deal raises questions about the involvement of the state in a deal the government hailed as a sign of foreign appetite for Russian assets in spite of U.S. and European sanctions.
A month after the sale of the 19.5% stake in Rosneft was announced, there is still no definitive explanation where all the long-term financing will come from; Glencore says Russian banks were involved in the deal, but there has been no confirmation of which lenders, or how much money they put in.
The Democratic Republic of Congo mines ministry said it would not oppose a transfer of ownership in the country’s biggest copper and cobalt producer, marking a departure from previous actions to block or tax changes in shareholding structures.
Glencore (OTCPK:GLCNF, OTCPK:GLNCY) said last week it was considering increasing its 69% stake in the Mutanda Mining project; the rest is owned by Israeli billionaire Dan Gertler.
In 2015, Mutanda produced 216K metric tons of copper and 16.5K tons of cobalt, more than any other mine in Congo, which is Africa’s biggest producer of the metals.
Mutanda, which produced more than 162K metric tons of copper and 18K metric tons of cobalt in the first nine months of 2016, has been hailed by analysts as one of Glencore’s most attractive copper assets even though it is in a country where anti-government demonstrations have been brutally suppressed in recent months.
Glencore paid $430M three years ago to buy a 14.5% stake in Mutanda from a privately owned company, which increased its holding to 69% with the rest controlled by Gertler.
Traders say Rosneft, which exports ~110M metric tons/year of oil, will need to find 11M tons of extra crude for the new contract with Glencore; "Competition is heating up, and someone is set to lose if Glencore was to obtain full volumes," a trader tells Reuters.
Meanwhile, the U.S. government says it will review the sale of the Rosneft stake (I, II) to see if sanctions were violated; state-owned Rosneft is one of the Russian entities covered by U.S. sanctions, but Russian officials say the deal is not directly affected by sanctions because income from the sale will go to the Russian state, not to Rosneft itself.
The best part of the deal for Glencore: Its stake gives it access to 220K bbl/day of additional Rosneft crude to trade, in addition to the five-year deal Glencore struck with Rosneft in 2012 that gave it the right to buy 180K bbl/day.
More than a year after it suspended its dividend, Glencore (OTCPK:GLCNF) is planning to reinstate payouts and distribute $1B to investors in 2017, another sign of how this year's sharp recovery in commodity prices is healing the wounds of the mining industry.
"We have delivered on our commitments and done so in a way that has preserved the long-term earnings capability of the company," CEO Ivan Glasenberg said in a statement.
Glencore reportedly plans to enter into a new five-year agreement with the Kurdish government to buy its crude, with deliveries rising from one cargo in January, to two in February-March, four in April and six from May onwards; six cargoes per month would represent 25% of overall exports from Kurdistan and would be worth at least $1.7B/year at today's price of ~$40/bbl for Kurdish oil.
The risks of investments linked to Kurdish crude is reflected in the high returns offered in the debt issue, with Glencore's planned five-year note reportedly carrying an interest rate of 12%.
Global copper markets will be oversupplied for at least two years, according to executives at some of the world's top copper producers, casting doubt on the chances of a prolonged rally in prices.
The cautious outlook comes after benchmark copper prices last week recorded their biggest weekly gain since 2011, largely fueled by Pres.-elect Trump's promises of infrastructure spending.
"In 2017, it will still be a relatively oversupplied market. In 2018 it will not be better than 2017," says a VP at Jiangxi Copper, China's largest copper producer; he also describes the market's recent moves as "irrational."
The founder and president of Maike Metals Group, one of China's top metals traders, says China's government needs to control "overspeculation" in the local futures market, hit by volatile trading over the last week as it was whipsawed by speculative cash.
The businessman, Dan Gertler, received payments meant for Congo’s state-run mining company Gecamines, according to a report by Global Witness, a London-based non-profit, which cites documents detailing the payments.
The payments would provide fresh evidence of financial ties between Glencore and Gertler, who is the subject of a U.S. Justice Department investigation.
The price of iron ore jumps 7.4% to $79.70/metric ton, marking its highest level since October 2014, on expectations of better than expected demand in the U.S. and China as well a slower than expected iron ore supply growth in recent months.
Iron ore prices have surged 18% since the Trump election victory; other commodities such as copper also have rallied due to expectations that Trump will aim to fulfill his promise of spending more on U.S. infrastructure.
But the rise may be overdone, according to Capital Economics Ltd., which expects iron ore to face growing pressure on rising supply from Australia and Brazil as well as headwinds to demand in China.
Copper was trading up 3% in late Asian trade, rising for a seventh straight session and up more than 15% for the week in what would be its biggest weekly gain since 1980, according to Reuters.
Copper already had been moving higher by a surge in China steel and coal prices, but Trump's surprise election victory and comments in his acceptance speech on increased infrastructure spending fueled further buying.
Traders say the pace of gains has been amplified by momentum-based fund buying, much of it from China, after prices this week smashed through a key chart resistance.
Analysts also are revising down expectations of mine supply for 2017, after January's price slump to six-year lows forced some high-cost mines to shut, and with new supply from Peru largely complete.
High-grade copper futures for December have soared 4% so far today, the most in more than a year, extending gains as investors prepare for a possible boom in infrastructure projects under a Trump presidency.
Along with improvement in economic data from China, a major buyer of industrial metals, “Trump’s pledge to spend, combined with a surge in speculative demand on exchanges from New York to London and Shanghai, have all helped drive copper up to a 16-months high,” says Ole Hansen, head of commodity strategy at Saxo Bank.
Along for the ride are copper producers Antofagasta (OTC:ANFGF +11.3%), Glencore (OTCPK:GLCNF +5.7%) and BHP Billiton (BHP +8.2%), as well as companies that may benefit from bulked-up spending on U.S. infrastructure projects, such as Dublin-based CRH (CRH +1%), which has surged 11% in two days as the U.S. market makes up 51% of its revenue.
Glencore narrows its FY 2016 EBIT outlook to $2.5B-$2.7B from previous guidance of $2.4B-$2.7B, and lowers full-year oil production guidance to 7.4M bbl/year from 8M, with a 100K barrel margin of error.
The mining and trading firm also says its Q3 production of copper, zinc, oil and coal was lower than at the same time last year but in line with expectations following announced supply reductions.
Glencore's biggest output decline was in zinc, down 30% Y/Y, while copper production fell 6%, coal down 11% and oil 25% lower.