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Oct. 15, 2015, 2:47 PM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is preparing a plan it hopes will result in an upgraded credit rating, in a previously undisclosed part of the miner’s attempt to strengthen its balance sheet, WSJ reports.
- Glencore has said it would reduce net debt by $10B, lowering the debt to ~$20B, but plans to raise cash through streaming deals, asset sales and other moves could potentially cut more than $12B, putting its net debt at ~$18B; with those reductions, Glencore is said to be targeting a credit rating that would put its debt 3-4 notches above junk.
- Glencore’s debt currently is ranked two notches above junk with a negative outlook by Moody's and S&P.
Oct. 15, 2015, 11:43 AM
- Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY) are postponing expansion plans for their jointly owned Collahuasi copper mine in Chile, as prices for the metal face six-year lows.
- The companies already had planned to cut output at Collahuasi by 30K metric tons as well as dozens of jobs because of difficult market conditions, but now the growth project also is delayed.
- Expansion plans to double Collahuasi's annual production to ~1M metric tons had been under consideration for some time, which was originally expected to cost $6.5B.
Oct. 13, 2015, 3:34 PM
- Grain handler G3 Canada, a joint venture between Bunge (BG +0.6%) and a Saudi Arabian firm, say they plan to spend at least C$50M ($38M) to build a grain terminal in southern Ontario to boost exports from the east coast.
- Production of wheat, corn and soybeans in Ontario has grown significantly, and the new facility will raise the company’s presence in eastern Canada, G3 CEO Karl Gerrand tells Bloomberg.
- The JV formed earlier this year also is looking at the feasibility of building a grain terminal in Vancouver with 180K tons of storage and as many as 10 inland terminals across the prairies by 2019, Gerrand says.
- The CEO also says G3 has little interest in bidding for a stake in rival Glencore's (OTCPK:GLCNF, OTCPK:GLNCY) agricultural business.
Oct. 13, 2015, 11:49 AM
- Rio Tinto (RIO -1.2%) CEO Sam Walsh tells WSJ he is not interested in making a bid for Glencore (OTCPK:GLCNF, OTCPK:GLNCY) despite the sharp decline in the latter's stock price in recent months.
- The CEO says he does not see Rio’s and Glencore’s businesses as well aligned and that Glencore operates in different geographic areas than Rio.
- Rio last year rebuffed a proposal by Glencore to merge the miners, and industry watchers had thought Glencore might make another run at Rio this year, but the company’s sharp stock decline has curtailed any deal plans for now.
- Walsh says Rio will look to use its solid balance sheet to make deals even as other miners struggle, noting that he is particularly interested in Tier-1 copper assets.
Oct. 13, 2015, 3:46 AM
- Nickel prices are in rebound mode after falling to a near seven-year low last week, buoyed by market speculation that Glencore (OTCPK:GLCNF) could slash output following cuts to its copper and zinc production.
- London Metal Exchange nickel stood at $10,460 a tonne on Tuesday, 15% above the $9,100 it fetched on August 12, its lowest price since December 2008.
- Glencore, whose shares have been hammered on debt burden worries, declined to comment on the speculation.
- ETFs: JJN, NINI
- Previously: Zinc prices soar after Glencore cuts output (Oct. 09 2015)
- Previously: Glencore's Zambian unit to cut more than 3,800 jobs (Sep. 23 2015)
- Previously: Reuters: Glencore in talks on streaming deals for three copper mines (Sep. 16 2015)
Oct. 12, 2015, 11:38 AM
- X2 Resources, the P-E firm founded by former Xstrata CEO Mick Davis, has emerged as the last remaining bidder for control of two Rio Tinto (RIO -2.2%) coal mines in Australia perhaps worth more than A$3B ($2.2B), Bloomberg reports.
- X2 is progressing in negotiations with Rio as other interested parties, including Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and New Hope Corp., are no longer in talks to buy the assets in New South Wales state’s Hunter Valley region, according to the report.
- The two Rio operations - Hunter Valley and Mount Thorley Warkworth - produced more than 20M metric tons of thermal coal in 2013 and 5.6M tons of semi-soft coking coal during 2013.
Oct. 12, 2015, 2:20 AM
- Glencore (OTCPK:GLCNF) has requested a trading halt of its Hong Kong-listed shares ahead of a proposal that's expected to divulge details about the sale of Australian and Chilean assets.
- In Australia, the firm has 19 mining complexes across the country, and is one of the biggest exporters of Australian grain.
- In Chile, Glencore owns and has stakes in several mines as well as a hydro-power project.
- Update: The company announces it will sell its wholly-owned Cobar copper mine in Australia and Lomas Bayas copper mine in Chile.
Oct. 9, 2015, 7:49 AM
- Glencore's (OTCPK:GLCNF, OTCPK:GLNCY) planned cuts to its zinc production sends zinc prices soaring 9% overnight and bringing other base metals including copper along for the ride.
- The move is good news for Glencore's stock price too, with shares up more than 11% in London and more than doubling since reaching a record low last week.
- Glencore's reduced operations in Australia, Kazakhstan and South America will reduce global zinc supply by 500K metric tons/year, not a trivial amount in a 14.5M tons/year global market.
- Zinc has, along with nearly all commodities, been under pressure from oversupply, sliding to a five-year low of $1,601.50/ton on Sept. 28.
- Further destocking of zinc and a more visible recovery in China’s industrial activities will be needed to propel a more sustained price rally, says Xiao Fu, head of commodity markets strategy at BOCI Global Commodities.
- ETFs: JJC, DBB, JJN, JJU, CPER, JJT, BOM, RJZ, BOS, FOIL, JJM, LD, BDD, NINI, CUPM, LEDD, UBM, BDG, HEVY
Oct. 9, 2015, 4:51 AM
- Embattled mining giant Glencore (OTCPK:GLCNF) is slashing its zinc production by a third in reaction to a 30% plunge in the commodity's price over the past few months.
- The company will cut 500K tonnes of zinc production, 4% of the world's total supply, including closing its Lady Loretta mine in Australia and Iscaycruz mine in Peru.
- Glencore shares are up nearly 7% in London in response to the move.
Oct. 8, 2015, 12:46 PM
- Mining companies operating in Zambia ask the government to set mineral royalties for both underground and open pit operations at 6% to mitigate the negative impact of falling copper prices on the industry.
- The government of Africa's second leading copper producer already cut mineral royalties for underground mines to 6% from 9% and those of open cast mines to 9% from 20% following an outcry by mining firms.
- Glencore's (OTCPK:GLCNF, OTCPK:GLNCY) Zambian unit has said it plans to lay off more than 3.8K workers due to lower metal prices and high production costs; other foreign mining companies operating in Zambia include First Quantum Minerals (OTCPK:FQVLF), Barrick Gold (NYSE:ABX) and Vedanta Resources (OTCPK:VDNRF).
Oct. 7, 2015, 3:15 PM
- Total (NYSE:TOT) CEO Patrick Pouyanne calls on the oil industry to be more proactive about finding solutions to reduce greenhouse gas emissions or risk being at the mercy of policy makers.
- The comments come a week ahead of a conference next week in Paris to discuss climate change initiatives such as carbon pricing; Pouyanne will join CEOs of seven other energy companies, including Shell (RDS.A, RDS.B), BP, BG Group (OTCQX:BRGXF, OTCQX:BRGYY), Repsol (OTCQX:REPYF, OTCQX:REPYY), Eni (NYSE:E) and state-run firms from Saudi Arabia and Mexico.
- Exxon (NYSE:XOM) CEO Rex Tillerson, who says innovation encouraged by free markets and competition is the best way to tackle climate change, will not be attending next week's confab.
- Also not attending is Glencore (OTCPK:GLCNF, OTCPK:GLNCY) head of global coal assets Peter Freyberg, who points out the need for global policy that acknowledges the "global energy reality" that fossil fuels including coal will continue to be used and that "addresses the funding gap to facilitate the build of high-efficiency, low emission power stations."
Oct. 7, 2015, 11:32 AM
- The banking industry may have significantly more exposure to Glencore (OTCPK:GLCNF, OTCPK:GLNCY) than is generally appreciated in the market, BofA analysts say in a new research note titled “The $100 Billion Gorilla In the Room.”
- Bank shareholders and regulators may be concerned that Glencore’s debt and trade finance deals, of which a “significant majority” are unsecured, will reveal more risk than expected and require more capital once the lenders are put through U.S. and U.K. stress tests, according to the analysts, who say that adding ~$50B of committed lines to the company’s own reported gross debt, exposure of financial firms could total 3x larger than Glencore’s reported adjusted net debt of less than $30B.
- Glencore has $35B in bonds, $9B in bank borrowings, $8B in available drawings and $1B in secured borrowings, in addition to $50B in committed credit lines, against which it draws letters of credit to finance trading, according to BofA.
Oct. 7, 2015, 7:58 AM
- Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP) and Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) soar near the top of U.K.'s FTSE 100 after Morgan Stanley upgraded the metal and mining sector to Attractive, saying valuations are at historically attractive levels.
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) also is higher after saying it closed its Eland platinum mine in South Africa, resulting in 970 job losses.
- Stanley sees commodity prices rising 19% by 2017, which would be "a sharp reversal from the experience in the last 18 months," and believes the recent acceleration of financial and administrative stimulus policies in China "will start to feed through in both actual activity levels and equity market expectations."
- The firm raises its recommendation for Rio and to Overweight from Equal Weight and for Anglo to Equal Weight from Underweight.
- In the U.S. premarket, RIO +8.7%, BHP +4.1%.
Oct. 6, 2015, 10:34 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) continues to push back against critics, saying that in the event of rating downgrade, the ratings' grid in its $6.8B five-year revolving credit facility would provide only a "modest" additional margin step-up.
- Glencore also says it has $4.5B of bonds outstanding, where a margin step-up of 125 basis points would apply if they were rated sub-investment grade by the agencies.
- Meanwhile, Investec is not backing off its gloomy view that recently helped to hammer Glencore shares, saying the company blames everyone else for its woes; yesterday, Glencore urged rivals to shut loss-making mines and blamed hedge funds for wilting commodities prices.
- Shares continue their roller-coaster ride in London trading, falling as much as 8% earlier but now +2.3% to its highest level in two weeks.
Oct. 5, 2015, 12:57 PM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) jumped 21% in London trading today, capping a 68% rally over the five past sessions following reassurances from management and speculation of asset sales.
- Over the weekend, The Telegraph reported Glencore would listen to takeover offers, even as management does not believe there are any buyers willing to pay a fair value for the business in the current market.
- Additionally, CEO Ivan Glasenberg says in his first public remarks since Glencore’s shares plunged a week ago that he believes copper prices ultimately will rise as mine supplies are pulled from the market, and "fundamentals will prevail" over hedge funds that he says have artificially pushed copper prices lower.
- Glasenberg says the company’s plans announced last month to take 400K tons out of the market with the shutdown of two copper mines in Africa "should have an effect on the price" as demand ultimately outweighs supplies.
Oct. 5, 2015, 5:02 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) rallies in Hong Kong and London trading as investors take solace in reports the company will consider takeover offers.
- Though senior management at Glencore isn't convinced a potential buyer will make a high enough offer in the current market, shares are jumping off the possibility the company will enter negotiations.
- Previously: Bloomberg: Singapore, Mitsui interested in Glencore agriculture sale (Oct. 02 2015)
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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