Wed, Feb. 25, 2:45 AM
- Rio Tinto (NYSE:RIO) will not be taken over by rival Glencore (OTCPK:GLNCY) because there is no value in it for shareholders and regulators will never let it happen, announced Rio Tinto chief executive Sam Walsh.
- Rio snubbed a takeover approach from Glencore last August to create a $160B mining and trading giant, but Glencore never ruled out making a fresh attempt.
- Under U.K. rules, it could return with an offer from April onward.
- Previously: Glencore confirms it is no longer considering merger with Rio Tinto (Oct. 07 2014)
- Previously: Rio Tinto says it turned down Glencore merger idea in August (Oct. 06 2014)
Thu, Feb. 12, 11:59 AM
- Rio Tinto (RIO +2.3%) has no major M&A plans in the works, preferring to focus on building new mines rather than buying low-quality assets in the current market environment, CEO Sam Walsh says.
- The CEO says shareholders have asked whether Rio had any interest in deals, with some wondering whether the company might consider approaching Freeport McMoRan (NYSE:FCX) or Anglo American (OTCPK:AAUKF, OTCPK:AAUKY), but "we are not doing that," adding that shareholders had dismissed the idea that Rio would give Glencore (OTCPK:GLCNF, OTCPK:GLNCY) "any air at all" to consider a tie-up.
- Talks are still ongoing with the Mongolian government to settle all outstanding concerns about the development of the underground Oyu Tolgoi mine, Walsh says while indicating that Rio has not offered to increase its stake in the mine.
- Walsh also says Rio will not take part in any upcoming tender process for two blocks of the massive Simandou iron ore deposit in Guinea.
- Earlier: Rio Tinto's $2B buyback signals shift in strategy
Wed, Feb. 11, 2:38 PM
- Iron ore miners in the next few months will have the opportunity to bid for the northern half of the Simandou deposit, one of the world's most sought-after iron ore deposits, Guinea's mining minster tells WSJ.
- The official claims he is not concerned that weak iron ore prices will affect the bidding for the assets, saying it could be at least five years until the mines actually begin producing.
- The Simandou deposits are at the heart of an international legal dispute: Guinea last year stripped the rights to mine the deposit from Vale (NYSE:VALE) and the mining arm of Israeli tycoon Beny Steinmetz’s conglomerate, with the government alleging that the rights were obtained through corrupt practices.
- The blocks once were controlled by Rio Tinto (NYSE:RIO), but a previous government in Guinea revoked its rights to mine them; Rio is still helping to develop the southern part of the concession.
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) CEO Ivan Glasenberg has criticized the over-production of iron ore, but the company has held discussions with Guinean officials about mining rights in Simandou.
Wed, Feb. 11, 4:07 AM
- Hit by a rout in commodity prices, Glencore (OTCPK:GLNCY) has announced plans to divest its 23.9% holding in platinum producer Lonmin (OTCPK:LNMIY), by handing the stake to its own shareholders.
- Glencore also said it intends to cut capital expenditure this year in response to market volatility, slashing its target to between $6.5B-$6.8B from a previously expected $7.9B.
- GLNCY +0.4% AH
Wed, Feb. 4, 11:21 AM
- Zambia's newly elected president has directed the government to expedite talks with miners and promptly resolve the impasse over the new mining tax regime to ensure the smooth running of the mining industry.
- In January, the country began implementing a new tax regime, requiring open-pit mines to pay as much as a 20% royalty on their revenue, up from 6%, while underground mines would pay an 8% royalty, up from 6%.
- The plan prompted Barrick Gold (ABX +1.2%) to announce it would suspend operations at its Lumwana copper mine, which supports nearly 4K direct jobs in the area, and other miners such as Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and First Quantum Minerals (OTCPK:FQVLF) to shelve expansion projects.
Wed, Jan. 28, 2:12 PM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) says it may shut some of its South African coal operations amid slumping commodity prices.
- Glencore's Optimum Coal Mines unit says the closures would reduce its overall production of thermal coal by at least 5M metric tons/year and more than 1,000 employees could lose their jobs.
- The company says it will not close its underground coal mining operations and could reopen its opencast mines if conditions improve.
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%.
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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