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.
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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.
Fri, Apr. 10, 10:19 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) says it will stop funneling sales from its Australian coal operations through Singapore, a move that comes amid growing concern in Australia about the impact of alleged tax avoidance by big miners.
- The company made the disclosure to an Australian inquiry examining the use of Singapore marketing hubs by BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RIO) and Glencore to reduce their tax bills.
- Glencore’s disclosure that it will sell its coal direct from Australia follows a clear signal this week from Australia’s treasurer, Joe Hockey, that he would block any formal takeover proposal made by the miner for RIO due to concerns such a move would undermine the country’s tax base.
Mon, Apr. 6, 12:45 PM
- A six-month moratorium on merger talks between miners Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and Rio Tinto (NYSE:RIO) ends tomorrow, and WSJ reports that the divergence between prices for copper and iron ore are giving deal supporters fresh hope.
- Glencore shares have climbed more than 15% since mid-January while Rio’s have dipped 3%, as iron ore prices recently hit 10-year lows below $50/ton in a long decline from highs of $190/ton reached in 2011; copper prices, meanwhile, have rebounded by ~5% to slightly more than $6K/ton in the past month.
- "Sooner or later either [Rio is] going to have to back away from the volume growth strategy, or they’re going to have to face the prospect that their earnings are going to fall through the floor,” says Sanford C. Bernstein analyst Paul Gait, adding that If Rio’s earnings keep falling and its share price suffers, “they’re going to be vulnerable to Glencore."
- As recently as February, Rio CEO Sam Walsh said he was not interested in a deal with Glencore.
- Another take: Glencore held back from Rio by value after takeover rule expires
Thu, Apr. 2, 11:36 AM
- The shackles keeping Glencore (OTCPK:GLCNF, OTCPK:GLNCY) CEO Ivan Glasenberg from grabbing control of Rio Tinto (NYSE:RIO) will be removed next week when a U.K. takeover rule barring a hostile offer expires, but recent share price moves are likely to keep Glasenberg's desires in check for now, Bloomberg reports.
- While both companies are weathering the commodity price rout, Glencore is down 15% since its approach was revealed in October, vs. a 6% drop in Rio, giving it a market value about £14B ($21B) more than its rival; as of yesterday, Glencore was valued at £37.1B vs. Rio's £51.6B.
Fri, Mar. 20, 11:26 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is one of the world’s largest traders of wheat that became a major agriculture player when it bought Canadian grain handler Viterra in 2012, but it still has no presence in the most important grain market of all: the U.S.
- That's enough for Bloomberg to start speculating that the company could become interested in targeting U.S. firms such as Andersons (ANDE +4.2%), which focuses on grains, ethanol and plant nutrients.
- "It may well make sense for the next deal to be in agriculture,” says the co-head of mining and metals investment banking at Barclays. “That’s how it works at Glencore, bolster your contribution to profitability and you’ll be provided with greater resources for growth."
Fri, Mar. 13, 4:58 PM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is ordered to pay ~$40M to OMV Petrom by a U.K. court for fraudulently shipping oil of a lower than purported quality to Romania in the 1990s.
- Marc Rich & Co., later to become Glencore, sold ~32 shipments to Romanian state firms during 1993-96 made up of cheaper crude blends than agreed, and falsified documents, profiting by ~$40M from the "deceit,” the judge says.
- The dispute has been the subject of two arbitration proceedings going back more than a decade; Petrom filed its U.K. lawsuit against Glencore in 2008.
Wed, Mar. 11, 10:43 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is near a deal to restructure its stake in RussNeft, one of Russia's 10 biggest oil companies, planning to convert assets it has in subsidiaries of Russneft into a 49% stake in the Russian firm's holding company.
- Glencore has been Russneft's partner since the Russian firm was founded in the early 2000s, and Russneft's debt to Glencore stands at up to $2B.
- No cash will change hands in the deal, which remains subject to approval from the Russian authorities.
Tue, Mar. 3, 8:45 AM
- The biggest takeaway from Glencore's (OTCPK:GLCNF, OTCPK:GLNCY) latest earnings report was that the miner is continuing to surprise with returns to shareholders despite a challenging commodity price environment.
- Glencore's 9% increase in annual dividend to $0.18/share follows a $1B share buyback program announced last year, of which $930M has been completed; CEO Ivan Glasenberg has said the company will return any excess cash to shareholders if it can’t find a way to generate a better return by reinvesting in the business.
- In the meantime, Glencore’s saving grace is its commodities trading division, where EBIT rose 18% Y/Y to $2.8B, helping offset a 23% drop in EBIT from its industrial activities to $3.9B; the slump in oil prices helped raise trading volumes and profit because future prices became higher than current prices, which led some energy companies to buy oil at current prices.
Tue, Mar. 3, 3:45 AM
- Glencore (OTCPK:GLNCY) posted full-year adjusted net income of $4.29B in 2014 vs. $4.58B a year earlier, beating analyst estimates, as strong performance in the company's marketing division helped it weather a sharp downturn in the commodities market.
- "While there remains the potential for future economic setbacks...physical demand for our raw materials remains healthy," announced CEO Ivan Glasenberg.
- The mining giant's income was heavily dented two years ago, after it took $11.4B in charges related to its merger with Xstrata.
GLCNF vs. ETF Alternatives
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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