Tue, Aug. 4, 8:31 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) says it will shut its 68%-owned South African Optimum coal mine in a dispute with state-owned utility Eskom, placing the mine in the local equivalent of bankruptcy proceedings after Eskom said it was not willing to renegotiate a two-decade old supply agreement.
- Optimum is contracted to supply Eskom with 5.5M tons/year of coal, and Glencore says it has been selling the coal to Eskom at significantly below the cost of production for several years.
- Eskom, which is battling a power crisis, supplies more than 95% of South Africa’s electricity and is dependent on coal-fired power stations.
Wed, Jul. 22, 9:52 AM| Wed, Jul. 22, 9:52 AM | 3 Comments
Thu, Jul. 2, 5:57 PM
- Senior executives from Glencore (OTCPK:GLNCY, OTCPK:GLCNF) have met Iranian officials in Tehran ahead of a possible deal on its nuclear program, in the first sign commodity trading houses are positioning to help the country return to the international oil market, Financial Times reports.
- Glencore’s visit follows discussions between European oil majors Shell and Eni and Iranian officials over long-term investments in the country’s oil and gas industry, but big oil traders may have a more immediate role to play.
- Iran is “not going to sit on the sidelines” waiting for the results of talks in Vienna and it preparing to move the moment sanctions are lifted, and it will "explore all the strategies that are available to it to help it regain its share of the oil market and find new buyers for its crude," says IHS Energy's Jamie Webster.
- ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, TWTI, OLEM
Mon, Jun. 29, 5:23 PM
- Rio Tinto (NYSE:RIO) is in serious talks with X2 Resources, the investment vehicle of former Xstrata boss Mick Davis, about a multibillion dollar sale of its thermal coal assets in Australia's New South Wales state, FT reports.
- Such a sale would be the miner's largest divestment under CEO Sam Walsh and mark a substantial restructuring of Rio, ending its investments in the coal used in power stations.
- Discussions could extend to include Rio’s metallurgical coal assets in Queensland, which yield a different grade of coal that is used in steelmaking.
- A move by Davis for Rio’s thermal coal assets could be countered by Glencore (OTCPK:GLCNF, OTCPK:GLNCY), which owns several mines in the same region and could afford to pay a higher price because of the potential to cut costs, the report says.
Wed, Jun. 24, 5:23 PM
- Zambia’s government is set to roll back contentious mining taxes, cutting royalties for underground mines below the recently revised 9% and ending a nine-month standoff that has hurt production and profits in Africa’s second largest copper producer.
- As of July 1, the government will revert to a 30% corporate tax - which many firms elude claiming they are not profitable - and reduced royalties of 9% on open pit mines and 6% on underground operations.
- A return to lower levies should be a windfall for mining companies operating in the country, such as Barrick Gold (NYSE:ABX), Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and First Quantum Mineral (OTCPK:FQVLF), Zambia’s largest foreign investor, all of which slowed operations as the taxation dispute raged.
- Withheld value-added tax refunds, however, remains a point of contention, as major copper miners say they are owed nearly $800M in value-added tax refunds stretching back to 2013.
Thu, Jun. 18, 8:59 AM
- Former Xstrata boss Mick Davis' X2 Resources is out of the race for a stake of up to 50% of Barrick Gold's (NYSE:ABX) Zaldivar copper mine in Chile after it was outbid in the first round of the sale process, Reuters reports.
- Chilean copper miner Antofagasta (OTC:ANFGF) is said to be interested in Zaldivar, but it is not clear if it would be a second round bidder; others in the running likely include Glencore (OTCPK:GLCNF, OTCPK:GLNCY); Teck Resources (NYSE:TCK), possibly backed by a Chinese partner; HudBay Minerals (NYSE:HBM), also with a partner; and an unnamed Chinese miner,
- Analysts have put a price tag of ~$1B on a 50% stake in the mine, which ABX put up for sale in April as it strives to cut $3B off its debt pile by year's end.
Fri, Jun. 12, 8:58 AM
- Shares in Lonmin (OTC:LNMIF) fall 5% in London trading after Glencore (OTCPK:GLCNF, OTCPK:GLNCY) handed over its stake to its shareholders this week, highlighting investor concern over South Africa's platinum sector.
- Glencore had inherited a 23.9% stake in Lonmin through its 2013 purchase of Xstrata but announced in February its intention to distribute the shares to investors; analysts had expected some selling pressure on Lonmin, anticipating many investors in Glencore, a diversified commodity player, would ditch the Lonmin shares because they were unwilling to bet on platinum.
- Platinum has lost ~43% of its value from a 2011 peak of more than $1,900/oz. and its outlook remains cloudy.
Thu, Jun. 4, 8:57 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) may further cut its coal production to help reduce the market glut that has pushed prices to multi-year lows, and that the “responsible” decision is to prune output at a time of oversupply, says the miner's head of global coal assets Peter Freyberg.
- Coal is "a very, very important part" of the company, Freyberg says, acknowledging tough market conditions but expressing optimism for the long term; China's appetite for coal may be waning, but demand from countries such as India is on the rise, he says.
- Freyberg also strikes back at coal critics, saying coal is not going to be “wished away... It is being used and it is going to be used, because building coal-fired power is still the cheapest way of powering people out of poverty."
Wed, May 27, 8:15 AM
- Top global iron ore miners BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RIO) and Vale (NYSE:VALE) are right to move forward with expansions into an oversupplied market since supporting prices through production cuts would hurt efficiency and prove difficult to coordinate, Goldman Sachs says.
- “First, production cuts would go against the prevailing trend of improving efficiency,” Goldman says. “Second, the required coordination among dominant producers with different incentives would be more difficult to achieve among three companies; successful cartels in oil and potash have featured only one or two dominant producers.”
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) CEO Ivan Glasenberg, among others, has said that oversupplying markets regardless of demand was damaging the industry’s credibility.
- Goldman expects the iron ore "war of attrition" will continue while prices gradually decline toward its $40/metric ton forecast by 2017.
Wed, May 13, 12:30 PM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is battling activists alleging the miner’s Colombian coal mines have taken profits out of the country and caused environmental and labor problems.
- A report by non-government organizations in Colombia and Switzerland, where Glencore is based, says the company does not pay sufficient royalties to the government and misreports financial statements.
- Tension between companies and the communities where they extract raw materials has been particularly intense in Colombia, where BHP has been faced with a strike at one of its nickel mines and Goldman Sachs is in talks to sell its mining operations in the country following labor disputes.
Wed, May 13, 11:56 AM
- Barrick Gold (ABX +4%) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY) are looking to sell a joint nickel development project in Tanzania, WSJ reports.
- The two miners each own half of the Kabanga nickel project and reportedly have been touting the project for several months, although neither company has hired a bank to sell the property.
- However, some bankers believe that, while Kabanga’s ore is of a high grade, a sale may prove difficult given the smaller size of the field of potential buyers vs. other metals such as gold or iron ore.
- Also, Kabanaga is considered in a remote location with little infrastructure, and nickel prices - which have been rising in recent weeks but is down 31% from two-year highs reached last May - remain volatile.
Tue, May 12, 7:23 PM
- United Steelworkers union workers at Century Aluminum's (NASDAQ:CENX) Hawesville, Ky., aluminum smelter - the fourth-largest in the U.S. - have been locked out of the plant after rejecting a company contract offer for the fourth time.
- "We're out of options," CENX says; the company is controlled by Glencore (OTCPK:GLCNF, OTCPK:GLNCY), which the USW says is launching anti-union campaigns elsewhere in the U.S. and other parts of the world.
- CENX says it expects the plant to continue to operate at full production; the smelter has a capacity of 244K metric tons/year.
Thu, May 7, 5:49 PM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) CEO Ivan Glasenburg reiterates his frustration over weak commodity prices - and the company's weak share price - saying at the annual shareholder meeting that many mineral and metal prices are down largely because other mining companies have overproduced relative to demand.
- The CEO has long been critical of iron ore producers for continuing to ramp up production even as steel demand from China tapers off.
- Glencore also is the world’s largest supplier of seaborne thermal coal, which has declined sharply in recent years as production has risen, but Glasenberg says coal “looks good going forward” partly because of increased demand in Indonesia.
- Glencore fell 2% today as the wider than expected Q1 loss and profit warning from ArcelorMittal, the world's no. 1 steel maker, helped sour sentiment for raw material stocks.
Tue, May 5, 5:24 PM
- Copper prices have risen to a 2015 high and their highest levels since November, as global demand is seen driving prices.
- A series of stimulus programs from China in recent months has helped convince investors that the world’s largest copper consumer is serious about steadying its economic slowdown; at the same time, disruptions in copper mining and supplies have sparked a belief that the market may end the year with global production and demand nearly balanced, rather than with a supply surplus.
- Glencore (OTCPK:GLCNF, ]]GLNCY]]), the world's no. 3 copper miner, reported its Q1 copper production fell 9% Y/Y, partly due to a planned shutdown for maintenance at its Collahuasi mine in Chile; disruptions at operations owned by BHP Billiton (NYSE:BHP) and Freeport McMoRan (NYSE:FCX) also have fueled speculation that a global surplus will shrink this year.
- ETFs: JJC, DBB, CPER, BOM, RJZ, BOS, BDD, JJM, CUPM
Tue, May 5, 7:56 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) reports lower than expected Q1 production at some of its mining assets, with copper output falling 9% Y/Y due to a planned maintenance shutdown at its Collahuasi mine in Chile and lower grades at two other South American mines due to mine sequencing.
- Q1 copper output totaled 350.7K metric tons, below most analysts forecasts, while own-sourced zinc production of 356.2K tons was up 16% Y/Y, nickel production rose 7% at 23.8K tons, and attributable ferrochrome production was gained 15% at 385K tons.
- Q1 coal production rose 4% to 35.6M metric tons, thanks to the commissioning of two new thermal coal projects in South Africa, but Glencore expects a potential output cut at the Optimum coal operation in South Africa to have an impact later in 2015.
- Glencore produced 2.6M barrels of oil, a 52% Y/Y increase, reflecting higher production from Chad.
- Bernstein analyst Paul Gait says the production figures are "disappointing," with base metals and coal lagging expectations.
Wed, Apr. 15, 8:24 AM
- Barrick Gold (NYSE:ABX) says it welcomes the decision by Zambia's government to set its mining royalties at 9% for both open-pit and underground mines, but that it will review the details before reconsidering plans to shutter its Lumwana copper mine.
- Zambia's January decision to increase royalties for open pit mines to 20% from 6% and those for underground mines to 8% from 6% had rattled unions, miners and investors, forcing the government to review the plan; companies such as Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and First Quantum Minerals (OTCPK:FQVLF) stopped expansion plans worth $1.5B.
- The new 9% rate still would be considered on the high end compared to other mining jurisdictions, but it might make more mines viable.
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Glencore Xstrata is one of the worlds largest global diversified natural resource companies and is one of the ten biggest companies within the FTSE 100 Index. The Groups industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries.
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