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Glencore Plc (GLCNF)

- OTCPK - Current
  • 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.
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  • Oct. 12, 2014, 3:37 AM
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  • Oct. 10, 2014, 6:11 PM
    • Rio Tinto (NYSE:RIO) may decide that its best defense against another takeover approach from Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is buying the likes of Freeport McMoRan (NYSE:FCX) in a "classic kind of defensive move," Bernstein analyst Paul Gait speculates.
    • While Rio is saying it’s better off going it alone, a deal for FCX could help it ward off any further advances from Glencore as well as provide a way to lessen its dependence on iron ore at a time when the metal is slumping, Gait says.
    • FCX "fits all the criteria of an attractive takeout candidate and would make sense for... anyone looking to increase their copper exposure and getting some very high-margin energy assets at the same time,” BB&T's Garrett Nelson adds.
    • FCX shares are now at their cheapest in more than 15 months relative to EBITDA.
    | 9 Comments
  • Oct. 10, 2014, 3:36 PM
    • Cliffs Natural Resources (CLF -1.2%) shares briefly popped higher, then returned to the red, following a report that Glencore (OTCPK:GLCNF, OTCPK:GLNCY) had talks with the company about its Australian iron ore assets last month.
    • While the talks were considered very preliminary, the call from Glencore shows CEO Ivan Glasenberg is not placing all his iron ore bets on another attempt at Rio Tinto (RIO -2.8%).
    • Glencore is not a major iron ore producer but trades the product for other miners; buying up active miners, or combining with Rio, would allow it to trade the commodity and potentially boost prices by closing mines or delaying expansion.
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  • Oct. 8, 2014, 10:30 AM
    • With any hope of Glencore (OTCPK:GLCNF, OTCPK:GLNCY) buying Rio Tinto (NYSE:RIO) on hold for six months, Glencore could turn to other targets such as Fortescue Metals (OTCPK:FSUMF) or Rio could pursue a defensive deal with a company such as Anglo American (OTCPK:AAUKF, OTCPK:AAUKY), Sanford Bernstein analyst Paul Gait speculates.
    • In the past, “we have had that kind of one action precipitate a whole cascade of events that puts a number of other guys in play," Gait tells Bloomberg.
    • On the other hand, Glencore's pursuit of Rio may not be over, Gait says, adding "the industrial logic and the strategic logic are compelling to the point of being overwhelming."
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  • Oct. 7, 2014, 10:33 AM
    • Rio Tinto (RIO -4.1%) drops sharply after Glencore (OTCPK:GLCNF, OTCPK:GLNCY) states it is no longer interested in pursuing a combination with Rio.
    • Glencore says it will be subject to Rule 2.8 of the City Code on Takeovers and Mergers for six months in relation to Rio while reserving the right to make an offer in the future.
    • Rio had said earlier that it rejected a Glencore bid in August and that no discussions are taking place.
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  • Oct. 7, 2014, 8:26 AM
    • Rio Tinto (NYSE:RIO) is up more than 5% in London trading after the miner said a deal with Glencore (OTCPK:GLCNF, OTCPK:GLNCY) was not in the best interests of shareholders, and there had been no contact between the companies since August.
    • Analysts caution that investors may be jumping in too swiftly, seeing the potential value of a deal but overestimating the likelihood of an agreement being struck.
    • Glencore has many reasons to chase Rio, and to not take the rejection in July as the final word, but the idea is less compelling for Rio, which sees itself as a specialist top-drawer miner with a marketing business attached, and views Glencore as the reverse.
    • A formal bid could face regulatory concerns in Australia, where Rio mines most of its iron ore and has a listing on the country’s stock exchange.
    • RIO -1% premarket after surging 9% in yesterday's trade.
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  • Oct. 6, 2014, 7:17 PM
    • Rio Tinto (NYSE:RIO) says it rejected an informal approach from Glencore (OTCPK:GLCNF, OTCPK:GLNCY) about a potential merger in August and has had no further contact.
    • Rio rose 9.1% in the session after a Bloomberg report around midday said Glencore had been laying the groundwork for a potential deal with Rio next year and has reached out to Rio’s biggest investor, Chinalco (NYSE:ACH), to gauge its interest in a deal.
    • Clarkson Capital notes that while a strategic merger would make sense, it believes too many obstacles would need to be overcome for a deal to happen; also, Rio's ADR share price is down less than 10% YTD even as iron ore prices are down more than 40% (Briefing.com).
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  • Oct. 6, 2014, 12:16 PM
    • Rio Tinto (RIO +9.8%) skyrockets on a Bloomberg report that Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is laying the groundwork for a potential merger with the company in the next year that would create the world’s largest mining company.
    • Glencore is said to have has reached out in recent weeks to Chinese state-backed Chinalco (NYSE:ACH), which is Rio’s largest shareholder with a ~9.8% stake, to gauge its interest in a potential deal.
    • However, no talks are yet underway between the two companies, no formal offer has been made, and none is likely before the end of 2014.
    | 3 Comments
  • Oct. 6, 2014, 10:14 AM
    • Glencore (OTCPK:GLCNF, OTCPK:GLNCY) CEO Ivan Glasenberg criticizes rival miner BHP Billiton (BHP +1.2%), claiming the latter company's plans to further expand iron ore output will hurt the development of one of Africa’s poorest areas.
    • Glasenberg says the huge amount of iron ore being produced by the world’s three biggest miners - Vale, Rio Tinto and BHP, already is impacting prices and that further expanding output, as BHP said today it intends to do, would make investing in African iron ore a less appealing prospect.
    • Iron ore prices have plunged 40%-plus this year to below $80/ton, their lowest level since 2009, exacerbated by the top iron ore miners ramping up production in the hope they can profit from economies of scale.
    | 1 Comment
  • Oct. 1, 2014, 9:43 AM
    • Glencore (OTCPK:GLCNF, OTCPK:GLNCY) says it has suspended some of its planned $800M in copper projects in Zambia after the government withheld at least $200M in tax refunds.
    • The dispute is a major setback for Glencore, which has invested more than $2B in projects in Zambia and is in the process of upgrading its copper assets in the country to boost output by at least 50% over the next two to three years.
    • First Quantum Minerals (OTCPK:FQVLF), whose Kansanshi mine is Zambia's largest copper mine by output, made a similar move in July to freeze its $1.5B in investments in the country over withheld tax refunds.
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  • Sep. 22, 2014, 7:14 PM
    • Tumbling iron ore prices and the Ebola outbreak are causing distress for mining companies that invested in a risky corner of West Africa; among those is London Mining (OTC:LIIGF), who says it may end an iron ore supply contract with Glencore (OTCPK:GLCNF, OTCPK:GLNCY) over a payment dispute.
    • Analysts say Glencore may be seeking to renegotiate a more favorable cash-for-ore deal, as Glencore's move looks much like previous episodes when the company has stepped in to rescue - and then take control of - distressed companies.
    • London Mining's off-take deal with Glencore, which advances it cash for future iron ore deliveries, is one of its few sources of working capital.
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  • Sep. 16, 2014, 10:26 AM
    • China says it will enact new laws banning the import and local sale of low-grade coal starting next year in a bid to curb its air pollution problem, with tough requirements in major coastal cities set to hit Australian miners such as BHP Billiton (BHP -0.4%), Rio Tinto (RIO -0.6%) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY).
    • China accounts for ~25% of Australia's coal exports, taking 54M metric tons of thermal coal and 30M metric tons of metallurgical coal from Australia in 2013; consultant Wood Mackenzie says all the thermal coal exceeded the new ash limit, while the met coal was below the limit.
    • The most stringent requirements are for cities in the southern Pearl River Delta, the eastern Yangtze River Delta and three northern cities including Beijing, Tianjin and Hebei; the areas will be banned from burning coal that has more than 16% ash and 1% sulfur.
    • Also, YZC -0.5%, KOL -0.4%.
    | 4 Comments
  • Sep. 3, 2014, 12:55 PM
    • Glencore (OTCPK:GLCNF, OTCPK:GLNCY) CEO Ivan Glasenberg rejects speculation about a possible takeover of Anglo American (OTCPK:AAUKF, OTCPK:AAUKY), saying the miner is interested only in assets it already trades.
    • “With Anglo, we don’t trade diamonds... and we don’t trade platinum,” Glasenberg says.
    • A Jefferies analyst wrote yesterday that a Glencore bid for Anglo is increasingly possible as the stock widens its outperformance over its smaller rival, and Anglo CEO Mark Cutifani told WSJ yesterday his company is open to takeover offers.
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  • Sep. 2, 2014, 12:55 PM
    • Vale (NYSE:VALE) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY) have broken off talks over combining their nickel assets in Canada in a deal that could have produced more than $1B in annual cost savings, Reuters reports.
    • Discussions over linking the companies' neighboring nickel mining and processing facilities in Canada's Sudbury basin are said to have ended partly due to disagreement over how to share costs and savings and to worries about government and labor union reaction to potential job cuts and shutdowns.
    • At the same time, a recovery in nickel prices has made cost rationalization less urgent, according to the report.
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  • Aug. 27, 2014, 6:58 PM
    • Commodity trader and miner Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and Chinese nickel producer Jinchuan Group are the front runners to buy BHP Billiton's (NYSE:BHP) Australian Nickel West division, Reuters reports.
    • Estimates of Nickel West's value vary greatly, with some analysts and industry sources saying it's worth up to a $1B while others tag negative figures to the asset that they say is burning cash.
    • Nickel West was not included in BHP's de-merger plans announced last week, but CEO Andrew Mackenzie said shortly thereafter that the company was in talks to sell all or part of the unit.
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GLCNF vs. ETF Alternatives
Company Description
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.