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.
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, 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
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
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.
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.
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.
Jul. 31, 2014, 12:17 PM
- ArcelorMittal (MT -2.7%) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY) are among potential bidders for Guinea’s Simandou project, the world’s largest untapped iron ore deposit, Bloomberg reports.
- MT has sought to expand its own iron ore business to cut reliance on mining companies for the steelmaking ingredient; it operates an iron ore mine in neighboring Liberia and is in talks with BHP about gaining a stake in the Nimba mine in Guinea.
- In April, Guinea's government revoked rights to half the Simandou project controlled by a venture between Israeli billionaire Beny Steinmetz and Brazil’s Vale, following claims of bribery and corruption.
Jan. 16, 2014, 2:08 PM
- “We would rather be too early than too late," Citi analysts say on going bullish on the global mining sector for the first time in three years.
- Yes, Citi is concerned about the potential for long-term structural demand for commodities in China and the potential of a seasonal slowdown in Q1, but the firm foresees better bottom-up fundamentals, notably from big diversified miners such as top picks are BHP Billiton (BHP +2.6%), Rio Tinto (RIO +3.6%) and Glencore (GLCNF, GLNCY).
- The firm expects a flat commodity-price environment ahead and a reduction in volatility, improving U.S. and European growth that will help boost commodities, and weakening commodity currencies from major exporters such Australia, New Zealand and South Africa that will boost miners.
- Earnings momentum has become positive too, as miners are cutting costs, improving balance sheets and aligning with shareholders’ interests.
- Citi still doesn't like gold and base-metal stocks; its least favorite big-cap miner is Anglo American (AAUKF, AAUKY).
Oct. 1, 2013, 8:33 AM
- Newmont Mining (NEM) joins the list of companies considering a bid for Glencore's (GLCNF.PK) Las Bambas copper mining project in Peru, FT reports.
- "The thing that is interesting is that it is further down the development path, it is closer to production," NEM CEO Gary Goldberg tells FT, adding "we would look at doing something with other partners."
- Two of China's biggest mining companies reportedly have submitted offers for the mine, which isn't producing copper yet and is expected to cost ~$5.9B to complete.
- NEM -2.2% premarket.
Sep. 16, 2013, 12:35 PM
- Glencore (GLCNF.PK) continues to divest some Viterra businesses following its $6.2B acquisition of the grain marketing and distribution company last year, as it sells its Dakota Growers Pasta unit to Post Holdings (POST +3.2%) for $370M.
- POST says the deal is part of its efforts to diversify its food offerings, and expects it to contribute ~$300M to sales and $42M-$46M in EBITDA annually.
Aug. 20, 2013, 10:30 AM
- The latest results for Glencore (GLCNF.PK -1.9%) and BHP (BHP -0.8%) show the good times are over for global miners (I, II), but the outlook is more difficult at Glencore, Andrew Peaple writes.
- Glencore's trading business performed reasonably well in H1 with operating profit up 6.4% despite tough markets, but trading is a low-margin business where it faces tighter regulatory scrutiny amid stiff competition.
- Even excluding the $7.7B writedown from the Xstrata merger, Glencore's EBITDA was down 9% in H1, vs. a 1% gain at BHP over the same period.
- Glencore's outspoken Ivan Glasenberg has criticized peers for wasteful investment and not taming supply growth, but "it is time the physician healed himself," Peaple writes.
Aug. 6, 2013, 3:55 PM
- Three bidders for Rio Tinto's (RIO -1.6%) majority stake in Iron Ore Co. of Canada, including Apollo (APO), Blackstone (BX) and Glencore (GLCNF.PK), have dropped out after second round bids were due last month, Reuters reports.
- Teck (TCK) is said to be one of two remaining bidders for the stake.
- The low offers, at a time when dozens of mining assets are for sale and demand for steelmaking commodities is uncertain, raise questions over the future of a sale that could still take months to tie up should Rio decide to push ahead.
Jul. 5, 2013, 3:12 PMCanada's two largest pension funds are sounding out potential partners for separate bids to acquire Rio Tinto's (RIO -1.8%) ~$4B in Canadian iron ore assets, WSJ reports. CPP Investment Board is said to be working with Apollo Global (APO) and others; Blackstone (BX) and Glencore Xstrata (GLCNF.PK) reportedly also have expressed interest. (earlier) | Comment!
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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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