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AAUKF vs. ETF Alternatives
Friday, Dec 132:52 PM
Friday, Dec 132:52 PM| 4 Comments
- Northern Dynasty Minerals (NAK +11.6%) exercises its right to acquire 100% of Anglo American's (AAUKF, AAUKY) interest in the Pebble copper/gold/molybdenum project in Alaska.
- NAK, which has partnered with Anglo for six years, will now go it alone and have the full benefit of the cash spent on the project - $556M so far, NAK says.
- NAK says a final decision on permit filing for the controversial project would be made in 2014.
Thursday, Dec 125:10 PM
Thursday, Dec 125:10 PM| Comment!
- Anglo American (AAUKF, AAUKY) says it has secured two large sales agreements for the majority of the forecast 26.5M metric tons of iron ore to be produced from Brazil's Minas Rio project, and says the oft-delayed project remains on course to start commercial production by the end of next year.
- Minas Rio should deliver a return on capital employed of 7% or more in 2016, a figure that will continue rise as the project ramps up production, Anglo CFO Rene Medori says at the company's investor day.
- Also, Anglo says it is working on a new mine plan that is expected to increase annual copper production at its Quellaveco copper project in Peru by ~25% to 281K tons/year, vs. earlier projections for the mine to produce 225K tons/year during a mine life of more than 30 years.
Thursday, Dec 1210:39 AM
Thursday, Dec 1210:39 AM| 1 Comment
- Anglo American (AAUKF, AAUKY) CEO Mark Cutifani reaffirms his turnaround plan to bolster the miner's return on equity employed to more than 15% by 2016 from 11% in H1 of this year but expects to face headwinds next year.
- "We have identified ~85% of the incremental EBIT necessary to achieve the level of return we expect from the business, and we are working on the areas where we see additional potential," Cutifani says.
- Anglo has underperformed its diversified mining peers over the past six years; since 2007, it has more than doubled its total capital employed but its rate of return has been cut by more than half.
Friday, Dec 63:30 AM
Friday, Dec 63:30 AM| 5 Comments
- South African markets are calm following the passing of Nelson Mandela, who was instrumental in the country's peaceful transition away from apartheid.
- One of Mandela's biggest achievements was enacting policies that paved the way for GDP to grow for 15 years, the longest period of expansion in South Africa's history. These policies included embracing the free market, cutting costs and attracting foreign investment.
- The question is now that Mandela has passed on, whether South Africa will feel more free to abandon the policies and conciliation that he espoused. For example, the ANC's youth wing wants to nationalize banks and mines, policies that Mandela ditched in 1994.
- There are also fears that Mandela's death could leave South Africa open to renewed racial and social tensions, such as those seen in the mine strikes over the past year or so.
- The economy is already not in a good way: unemployment is 24.7% and there is a large inequality in earnings between blacks and whites.
- The FTSE/JSE Top 40 is +0.3%, the South African 10-year bond yield is -2.5 bps at 8.16%, and the USD-ZAR is +0.2% at 10.4732 rand.
- Tickers: HMY, AGPPY, AGPPF, AAUKY, AAUKF, SSL, GFI, ABX, AU, SBGGF.
- ETF: EZA
Wednesday, Nov 206:50 PM
Wednesday, Nov 206:50 PM| 28 Comments
- Coal (KOL) may become the new tobacco if activist investors have their way; growing numbers of them, concerned about greenhouse gas emissions, are calling to divest holdings in companies that mine and burn coal.
- The U.K. today joined a U.S. commitment to minimize funding of foreign coal-fired power stations and says it will seek wider support for the pledge from other nations and development banks.
- What galls the activists: Global demand for coal is not in retreat. In 2011, coal was used to generate 30.3% of the world’s primary energy, the highest level since 1969, and the share slipped only to 29.9% last year.
- Like tobacco companies, coal producers may move to paying high dividends to attract investors amid an uncertain longer term future for the fuel.
- BTU, ACI, BHP, RIO, GLCNF, GLNCY, AAUKF, AAUKY, PCXCQ.
Friday, Oct 187:58 AM
Friday, Oct 187:58 AM| Comment!
- Anglo American (AAUKY.PK, AAUKF.PK) reports mixed Q3 production results, with copper, diamond and nickel output up but iron ore down and platinum output flat Y/Y.
- Q3 copper production rose 32% Y/Y and 13% Q/Q to a quarterly record ~207K metric tons, as output at its Collahuasi mine in Chile more than doubled; output and revenue at Collahuasi, a venture with Glencore Xstrata, has been plagued by lower ore grades, extreme weather and accidents.
- However, iron ore output fell 24% Y/Y and 16% Q/Q to 9.5M metric tons, as weaker production at unit Kumba Iron Ore’s Sishen mine was only partly offset by increased output at Kolomela.
Friday, Oct 411:29 AM
Friday, Oct 411:29 AM| 2 Comments
- Vale (VALE -1%) is tagged with a Sell rating and $13 price target at Barclays, which cites overexposure to iron ore prices.
- 92% of Vale’s earnings, or 77% of its net present value, comes from iron ore; a 10% change in the iron ore price would reduce Vale’s NPV by 49% and 2014 earnings by 32%, according to Barclays.
- The firm's price profile assumes iron ore $105/ton in 2014 retreating to $90/ton by 2016, resulting in Vale’s earnings falling 51% by 2016 vs. 2013.
- Barclays ranks Vale near the bottom of global peers BHP, RIO and Anglo American (AAUKY.PK, AAUKF.PK) on all key metrics including production growth, free cash flow generation, earnings growth, gearing, return on equity and return on invested capital.
Friday, Sep 2711:07 AM
Friday, Sep 2711:07 AM| 1 Comment
- Fewer than one in five workers showed up today at Amplats' (AGPPY.PK, AGPPF.PK) South African platinum mines around the city of Rustenburg, in protest against planned job cuts.
- Amplats - part of global mining group Anglo American (AAUKY.PK, AAUKF.PK) and the world's No. 1 producer of the precious metal - said last month it would cut 4,800 jobs.
- Unlike work stoppages since that declaration, Friday's action is legal and in keeping with a change of tactics by the mineworkers union, which was behind a wave of wildcat strikes that rocked South Africa's gold and platinum sectors last year and drove Amplats into the red.
Friday, Sep 279:08 AM
Friday, Sep 279:08 AM| Comment!
- ArcelorMittal (MT) and Kumba Iron Ore (KIROY.PK) say they are in talks over a potential new ore supply agreement, as the companies try to resolve a rights and pricing dispute spanning more than three years.
- Kumba, a unit of Anglo American (AAUKF.PK, AAUKY.PK), had suspended an agreement with MT in 2010 under which it sold South African iron ore at a discounted price of production costs; the deal was in place because MT had a mining right in Kumba's Sishen mine that lapsed.
- MT -1.7% premarket.
Wednesday, Sep 2510:28 AM
Wednesday, Sep 2510:28 AM| Comment!
- Anglo American (AAUKY.PK, AAUKF.PK) is revising a deal to sell its Amapa iron ore operation in Brazil to Zamin Ferrous following a landslide that destroyed key infrastructure and left it unable to export from the port serving the mine.
- Anglo will now sell 100% of the operation to Zamin for an initial $136M plus a deferred conditional $130M over five years tied to the iron ore price, after agreeing earlier this year to sell a 70% stake to Zamin for an undisclosed sum.
- The announced sale price is a fraction of what Anglo paid for control of Amapa when it bought the operation five years ago as part of the $6.65B Minas Rio acquisition from billionaire Eike Batista.
Wednesday, Sep 1811:35 AM
Wednesday, Sep 1811:35 AM| 4 Comments
- Alaska officials and Northern Dynasty Minerals (NAK -1%) are putting the best face on the future of the Pebble copper and gold project even without its heavyweight financial backer, Anglo American (AAUKF.PK, AAUKY.PK), which pulled out on Monday.
- Pebble is "a huge, valuable asset" for Alaska, NAK CEO Ron Thiessen says, adding that he remains confident the mine will be built within the next 10 years; " I would suspect there are companies out there that are still prepared to do a transaction with us on Pebble."
- NAK shares have plunged by a third since the Monday announcement.
Monday, Sep 1611:21 AM
Monday, Sep 1611:21 AM| Comment!
- Shares of Northern Dynasty Minerals (NAK -37.8%) are crushed after Anglo American (AAUKF.PK, AAUKY.PK) withdrew from a partnership to develop the Pebble copper project in Alaska.
- CEO Ron Thiessen says NAK plans to begin the permitting application process for the project by the end of this year, despite the pullout; he says Anglo's decision was due to its desire to re-prioritize its project pipeline rather than any concern about the project.
- The Pebble deposit is estimated to hold 81B lbs. (37M metric tons) of copper, 5.6B lbs. of molybdenum and 107M oz. of gold.
Monday, Sep 167:58 AM
Monday, Sep 167:58 AM| Comment!
- Anglo American (AAUKF.PK, AAUKY.PK) says it is withdrawing from the Pebble copper project in Alaska, a joint venture with Northern Dynasty Minerals (NAK).
- Mark Cutifani, who took charge of Anglo this year following the resignation of Cynthia O’Carroll, wants to purge the miner's pipeline of marginal projects in favor of high-value, low-risk projects.
- Anglo had spent $540M up to the end of June on Pebble, according to NAK, which says it will hold on to the project.
- Anglo says it will take a $300M impairment charge on the withdrawal.
Friday, Aug 308:18 AM
Friday, Aug 308:18 AM| 1 Comment
- As a mining strike looms, new Anglo American (AAUKY.PK, AAUKF.PK) CEO Mark Cutifani tells WSJ ~50% of South Africa's gold and platinum operations are operating at a loss and "you will see shafts in platinum and gold close if the wage hike goes badly.”
- Some miners already have begun to sell their South African assets and redirect spending elsewhere; Gold Fields (GFI) last year sold all but one gold mine in the country, and Harmony Gold (HMY) is directing more of its exploration money to Papua New Guinea than to South Africa.
- More labor tension: Anglo American Platinum (AGPPY.PK, AGPPF.PK) will fire 3,300 workers at its South African mines to revive profitability; ~45% of Amplats' business is in South Africa.
Friday, Aug 234:49 PM
Friday, Aug 234:49 PM| 3 Comments
- New EPA chief Gina McCarthy plans to take a tour next week of what could become one of the world’s largest copper mines: the Pebble project in Alaska, to be developed by Northern Dynasty (NAK) and Anglo American (AAUKY.PK, AAUKF.PK).
- The relationship between EPA and the Pebble partnership has been strained since the agency issued a critical assessment of the project before the companies submitted a formal proposal for it.
- The EPA is looking to finalize its analysis before the end of the year.
Friday, Jul 268:20 AMAnglo American (AAUKF.PK, AAUKY.PK) reports H1 earnings of $1.9B (£1.2B), down 34% Y/Y, due to slowing Chinese demand for its coal, iron ore and precious metals, though losses were tempered by continued strong demand for diamonds. Consolidates 10 business units into six. Says it has started a process to secure an attractive value from the sale of a stake in its Minas Rio iron ore project. |Friday, Jul 268:20 AM| Comment!
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