Wed, Jan. 21, 12:29 PM
- BHP Billiton's (NYSE:BHP) planned South32 spinoff may appeal to Glencore (OTCPK:GLCNF, OTCPK:GLNCY), Bloomberg speculates, because the newly formed company is taking shape near the bottom of the commodity cycle and it produces many of the same metals, including silver, manganese, aluminum.
- Glencore CEO Ivan Glasenberg is looking for undervalued acquisition targets, and his record as a relentless acquirer of assets makes him a potential buyer of South32, according to the report.
- Glencore’s market value has fallen more than 25% amid falling prices for metals and minerals, curbing Glasenberg’s prospects of a renewed deal with Rio Tinto, which some analysts say may make the cheaper South32 a more realistic option.
Wed, Jan. 14, 12:39 PM
- Citi cuts price targets for iron ore to $58 for 2015 and $62 for 2016, down from its prior estimates of $65 for both years, and lowers its outlook for thermal and met coal.
- Citi warns its downwardly revised forecast means it now expects earnings for major mining companies will fall by 9%-21% for 2015 and by 3%-16% in 2016.
- Rio Tinto (RIO -2.5%) is the exception, as Citi sees earnings rising 7.1% this year and 10.6% next year due to the company’s greater exposure to the weaker Australian dollar.
- The firm cuts its price target for Glencore (OTCPK:GLCNF -7.2%) by 8% to £3.60 from £3.90 and sees earnings falling 21% and 16% respectively in 2015 and 2016.
- Citi says it is still bullish on the sector, but warns that metals and mining companies will only slowly grind higher over the next few years.
- Also: BHP -4.5%, VALE -5%, FCX -12%, SCCO -4.9%, TCK -9.7%, CLF -4.4%, CENX -9.1%, MT -4.2%, X -4.9%, NUE -3.4%, STLD -2.6%, BTU -9.8%, ANR -8.8%, ACI -8.9%.
Wed, Jan. 14, 10:53 AM
- Glencore (OTCPK:GLCNF -6.9%) tumbles to its lowest levels since the company went public in 2011, falling more than 10% at one point before recovering slightly.
- Glencore has long underperformed most other major global miners, thanks to its model combining mining and physical trading of commodities, and continues to do so today.
- Analysts also say the steeper fall in copper prices compared with iron ore so far this year could thwart any potential move by Glencore to take over Rio Tinto (RIO -2.2%), as "Glencore's commodity mix hasn't played in its favor in the last few week,s and Rio is looking more expensive as a consequence."
- Copper accounted for 38% of Glencore's operating profit in H1 of last year compared with Rio, which only generated 10% of its operating profit from copper during the same period.
Wed, Jan. 14, 7:57 AM
- Mining stocks look headed for sizable losses, as copper prices sink to five-and-a-half year lows and the World Bank lowers its forecast for global economic growth.
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) -11.5% in London trading, Antofagasta (OTC:ANFGF) -7% in London, Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) -9.5% in London, Vedanta (OTCPK:VDNRF) -18% in London, Rio Tinto (NYSE:RIO) -4.3% premarket in the U.S., VALE -2.9%, FCX -5.1%, CLF -2.6%.
- BHP Billiton (NYSE:BHP) -7.5% in London and -5.5% U.S. premarket after S&P Capital IQ downgraded shares to Hold from Buy, expecting "weaker commodity prices to increasingly impact on group profits as hedges expire and see currency headwinds from a stronger [U.S. dollar]."
- ETFs: XLB, XME, SLX, COPX, VAW, UYM, CU, IYM, HAP, IRV, MXI, SMN, GNR, GUNR, PICK, MATL, FXZ, PYZ, CRBQ, RTM, CCXE, FMAT, GRES, SBM
Mon, Jan. 5, 4:46 AM
- Glencore (OTCPK:GLNCY) will restart coal mining operations in Australia, following a three-week suspension aimed at combating a global supply glut, which did little to turn around depressed prices.
- Thermal coal spot prices declined steadily during 2014 in response to surplus supply and protectionist trade measures implemented by China to support its domestic coal industry.
- Related ETF: KOL
Dec. 15, 2014, 5:57 PM
- BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) are amassing vast copper holdings in a push to capture a greater chunk of the $140B world market, apparently aiming to squeeze out high-cost producers just as they did in the global iron ore business, Reuters reports.
- Separately and in joint ventures, Rio and BHP intend to mine millions of additional tons of copper, despite seeing an oversupplied market for the next few years.
- While Rio and BHP likely would not hold the same degree of dominance over copper that they do in iron ore - Codelco, Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and Freeport McMoran (NYSE:FCX) will remain bigger producers for the foreseeable future - their influence on global supply would be enhanced.
- The drive in copper also could give BHP and Rio an advantage over rival Vale (NYSE:VALE), whose exposure to copper is less than half that of BHP and Rio.
Dec. 15, 2014, 11:42 AM
- Unionized workers at the Antamina copper and zinc mine in Peru end a strike that began last Wednesday over demands for better labor conditions and a greater profit share, and will restart work today, according to the mine owners.
- The mine is controlled by BHP Billiton (NYSE:BHP) and Glencore Xstrata (OTCPK:GLCNF, OTCPK:GLNCY), which each own 33.75% stakes, while Teck Resources (NYSE:TCK) has a 22.5% interest and Mitsubishi owns 10%.
- Antamina produced about one-third of Peru’s copper production in 2013; the country is the world’s third-biggest producer of copper.
Dec. 10, 2014, 11:33 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is weighing the possibility of continuing buying back its shares next year against other potential opportunities, the miner said today at an investor presentation.
- Glencore said it is retaining its focus on returning excess cash to investors amid declining prices for its two of its key sources of profit, coal and copper.
- Glencore also said it would continue to take a disciplined approach to expanding its production capacity, and CEO Ivan Glasenberg again criticized the mining industry for its over-investment in certain commodities.
Dec. 5, 2014, 3:45 PM
- Bernstein analysts found some positives to take away from yesterday’s investor presentation from Rio Tinto's (RIO -1.5%) Sam Walsh, including the CEO's insistence that a potential mega-merger with Glencore (OTCPK:GLCNF, OTCPK:GLNCY) would prove "a poor strategic match" and that Rio was not planning any major acquisition to protect itself from a potential takeover.
- Walsh reiterated a number of times that the miner would materially increase shareholder returns, "leaving little doubt about Rio Tinto’s intention"; the analysts also say Rio's balance sheet could surprise on the upside, with a one-time gain potentially boosting free cash flow without borrowing.
- One reason Rio may be undervalued: Rio’s stake in the Pilbara arguably is the best mining business in the world, but the market does not yet agree with only a 5x EV/Ebitda multiple on the stock.
Dec. 1, 2014, 7:57 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and Merafe Resources (OTCPK:MRAFY) reached an agreement with South Africa's metalworkers union to end a strike at the world’s largest ferrochrome operation.
- The operations are near the platinum belt in South Africa, where a five-month strike shut the world’s biggest producers of the precious metal this year.
- Glencore owns 79.5% of the venture with Merafe holding 20.5%.
Nov. 25, 2014, 7:57 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and Peabody Energy (NYSE:BTU) form a joint venture to develop an open-cut coal mine between existing operations run by the two companies in Australia's New South Wales state.
- The 50-50 JV will dig the pit between Glencore's United coal mine in the Hunter Valley and BTU's Wambo operations nearby; the project is expected to start in mid-2017 and could produce 6M metric tons/year of thermal coal used in power stations.
- The plan, expected to take effect in mid-2017, would improve recovery of coal from the combined operations and sharply cut capital and operating costs.
Nov. 24, 2014, 6:28 PM
- Various hedge funds were told this month by a prominent London mining banker to prepare for an all-but-inevitable takeover of Rio Tinto (NYSE:RIO) by Glencore (OTCPK:GLCNF, OTCPK:GLNCY), Bloomberg reports.
- Former JPMorgan Chase dealmaker Ian Hannam, who now runs a boutique advisory firm, reportedly convened reps of more than 20 investors to share his views on the potential deal, perhaps intended in part to help position his firm to win a role in the transaction.
- Glencore said last month it had abandoned a bid for Rio after a July proposal worth ~$160B was rebuffed.
Nov. 20, 2014, 6:28 PM
- Nevsun Resouces (NYSEMKT:NSU) has emerged as a potential takeover target, and Financial Post's Peter Koven sees many positive factors to explain the interest and one big negative: Eritrea.
- NSU’s Bisha mine is extremely rich, with high-grade copper output that will transition into high-grade zinc output in coming years when many analysts expect shortages in the zinc market.
- But the downside is that Bisha is in Eritrea, which is ruled by one of the world’s most repressive governments and has caused major problems for the company.
- If a contested takeover battle is going to happen, analysts say offers would have to come from companies - perhaps Glencore (OTCPK:GLCNF, OTCPK:GLNCY) or Lundin Mining (OTCPK:LUNMF, LUNCF]]) - that are very comfortable in high-risk jurisdictions.
Nov. 14, 2014, 2:39 PM
- Thermal coal and coal stocks are rallying after Glencore (OTCPK:GLCNF, OTCPK:GLNCY) said it would halt production at its Australian mines for three weeks to try to tackle a global supply glut.
- Deutsche Bank says the move is an important signal from the world’s largest producer of seaborne thermal coal: “Taking 5M tonnes out of the 1.1B [a year] seaborne market is a relatively small starting point, but may mark the start of more to come."
- But other analysts say it is no sure thing that Glencore’s move would be copied by others or lead to permanent mine closures; unlike some rivals, Glencore has less exposure to "take or pay” contacts which oblige miners to pay charges of up to $25/metric ton to use rail and port.
- ACI +10.7%, ANR +10.1%, WLT +5.2%, BTU +4.3%, CLF +3.2%, CLD +2%, CNX +1.9%.
- ETF: KOL
Nov. 13, 2014, 4:58 PM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) says it will shut down its Australian coal mines for three weeks, resulting in a 5M metric ton reduction in thermal coal production.
- “This is a considered management decision given the current oversupply situation and reduces the need to push incremental sales into an already weak pricing environment,” the company says.
- The world’s largest exporter of thermal coal owns 13 coal mines across Australia, which produced more than 80M metric tons of thermal and coking coal last year.
- ETF: KOL
Oct. 13, 2014, 10:37 AM
- Zambia plans to more than triple royalties on open-pit mines, underscoring a growing trend across Africa where governments are changing tax regimes and adjusting ownership structures to get a bigger share of natural resources.
- The finance ministry says in a budget report that starting in Jan. 2015 royalties will increase to 20% from 6% for open-pit copper mines and to 8% from 6% for underground mines.
- Mining companies with open-pit mines in Zambia include Barrick Gold (NYSE:ABX) and First Quantum Minerals (OTCPK:FQVLF), while Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and Vedanta Resources (OTCPK:VDNRF) operate underground mines.
- Zambia has withheld $600M of tax refunds from miners since last year, already straining the relationship between the government and mining companies.
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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