|Bid||254.60 x 0|
|Ask||254.65 x 0|
|Day's Range||253.80 - 256.25|
|52 Week Range||188.51 - 343.60|
|Beta (3Y Monthly)||0.91|
|PE Ratio (TTM)||41.07|
|Earnings Date||Feb 19, 2019 - Feb 25, 2019|
|Forward Dividend & Yield||0.16 (6.40%)|
|1y Target Est||4.95|
(Bloomberg) -- Dubai’s DSA Investments has teamed up with two South African companies to bid for coal assets that Glencore Plc was pressured into selling to a company controlled by the politically connected Gupta family in 2015.Orchid Mining, a unit of DSA, owns 49% of the venture making the bid and the balance is held by the Smada Group and Nehawu Investment Holdings, which invests funds on behalf of the National Education, Health and Allied Workers’ Union.“I see the opportunity in the coal industry,” said Yusuf Adams, the founder of Johannesburg-based Smada, which has 4,000 employees and mainly operates in the property, security and information technology industries. “Partnering with DSA is an opportunity for Smada.”Tegeta Exploration & Resources (Pty) Ltd., which owns the coal mines and was controlled by the Gupta family and a son of former South African President Jacob Zuma, became embroiled in controversy because of corruption allegations around its supply contracts with power utility Eskom Holdings SOC Ltd. The company is now under administration.Port AccessIts assets include the Optimum coal mine, the Koornfontein colliery and a share in Richards Bay Coal Terminal, which allows it to export the fuel. Port access for coal producers in South Africa is a prized asset and Richards Bay is the biggest coal export port on the continent.The venture will bid for all the assets, said Adams, adding that Smada derives its name by spelling his surname backward. By being 51% owned by black South African companies it complies with Eskom’s procurement guidelines as it tries to boost black participation in the economy a quarter of a century after the end of apartheid. Initially the venture hadn’t included Smada.Adams said he was introduced to DSA by the Qatar Investment Authority, with which he has “a relationship.”Louis Klopper, one of the business rescue administrators running the sales process, confirmed the bid from DSA and Smada. The deadline for bidders submitting their information is Tuesday evening South African time and they are targeting a final decision on the winning bidder in about a month.DisrepairA sale could end the controversy around the mines that have sunk into disrepair.In 2015, the then-mining minister, Mosebenzi Zwane, flew to Switzerland to meet with Glencore’s chief executive officer, Ivan Glasenberg, to convince him to sell the assets to the Guptas. Eskom loaned them part of the money to buy the company, and gave them supply contracts on favorable terms. The transaction is being investigated by a state-appointed commission of inquiry into allegations of corruption.DSA says it manages assets worth more than $10 billion. Nehawu Investment has assets worth more than 3 billion rand, according to its website.(Adds detail on Richards Bay in the fifth paragraph)To contact the reporters on this story: Antony Sguazzin in Johannesburg at firstname.lastname@example.org;Archana Narayanan in Dubai at email@example.com;Paul Burkhardt in Johannesburg at firstname.lastname@example.orgTo contact the editors responsible for this story: John McCorry at email@example.com, Robert Brand, Hilton ShoneFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Demand for metals used in battery electric vehicles could rise sixfold if electric cars reach 8% of road traffic by the mid-2020s, delivering huge dividends for producing countries like Democratic Republic of Congo, Moody's said on Tuesday. The credit ratings agency said a worldwide shift to electric vehicles would likely drive up demand for cobalt, of which DRC is the world's number one producer, as well as lithium, nickel and copper.
Digging into the copper mining industry can reveal some potential investment opportunities and better explain what it takes to make money from an ore that is growing in value.
Canada, locked in a major dispute with Beijing, is taking the first formal step at the World Trade Organization to challenge China's decision to block Canadian canola exports, Trade Minister Jim Carr said on Friday. China, angry at Canada's detention of a top Huawei Technologies Co Ltd executive last year on a U.S. arrest warrant, blocked all imports of canola seed in March on the grounds they contained pests.
The Swiss-based commodity trader took majority control last June of PolyMet Mining Corp, which is developing a mine in the Midwest state near the Canadian border estimated to hold a century's worth of copper and nickel, critical to the development of electric vehicles. It is the first time that Glencore has controlled a major mining project in the United States, where President Donald Trump has cut mining regulations and red tape in a bid to encourage domestic mining, a marked change from predecessor Barack Obama, who favored stricter oversight of the sector and slowed or halted several large mining projects. Glencore for years has operated in regions considered high-risk, high-reward, making its shares a draw for some investors who saw the more conservative investing policies of peers, including BHP Group PLC, as too tame.
The Swiss-based commodity trader took majority control last June of PolyMet Mining Corp , which is developing a mine in the Midwest state near the Canadian border estimated to hold a century's worth of copper and nickel, critical to the development of electric vehicles. It is the first time that Glencore has controlled a major mining project in the United States, where President Donald Trump has cut mining regulations and red tape in a bid to encourage domestic mining, a marked change from predecessor Barack Obama, who favored stricter oversight of the sector and slowed or halted several large mining projects. Glencore for years has operated in regions considered high-risk, high-reward, making its shares a draw for some investors who saw the more conservative investing policies of peers, including BHP Group PLC , as too tame.
Zambia should keep mineral royalties capped at 7.5% in the 2020 budget to safeguard the health of the mining sector and promote additional investment, the Chamber of Mines said on Tuesday. The mining body said in proposals submitted to the finance ministry that the 2019 mining tax regime had raised the tax burden on mines to unsustainable and uncompetitive levels. "If the 1.5% increment on each band of the sliding scale is to be maintained, the maximum rate should be capped at 7.5%, for an LME copper price equalling or exceeding US$7,500/tonne," the Chamber of Mines said.
Moody's Investors Service ("Moody's") has today upgraded the rating of DBCT Finance Pty Ltd.'s senior secured ratings to Baa3 from Ba1, and revised the outlook to stable from positive. "IMPORTANT NOTICE: MOODY'S RATINGS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS. DBCT is the financing affiliate of DBCT Management Pty Limited and DBCT Trust, which collectively have economic ownership of the Dalrymple Bay Coal Terminal through a long-term lease, comprising a 50-year initial and 49-year option period.
A World Bank tribunal has ordered Colombia to repay a $19 million fine it levied on Glencore's coal mining subsidiary Prodeco but declined the company's petition for $575 million in damages, the government said on Tuesday. Prodeco is one of the largest coal miners in the Andean country, which is the world's fifth-biggest exporter of coal. Glencore had asked the World Bank's International Center for Settlement of Investment Disputes to award it damages after Colombia's national comptroller fined it the $19 million in January 2016.
A federal appeals court on Tuesday revived lawsuits by aluminum purchasers that accused Goldman Sachs, JPMorgan Chase, mining company Glencore and other companies of conspiring to drive up prices for the metal by reducing supply. In a 3-0 decision, the 2nd U.S. Circuit Court of Appeals in Manhattan said a federal judge erred in dismissing antitrust claims by "direct" purchasers of aluminum such as Novelis, and by other purchasers including Eastman Kodak, Fujifilm and Reynolds Consumer Products.
Glencore's shutdown of its Mutanda mine has jeopardized global supplies and could significantly hurt electric vehicle makers.
Russian state-controlled bank VTB has asked President Vladimir Putin to help it create a Russian grain champion to curb the role of foreign traders and give the state greater control over exports, a letter seen by Reuters shows. The letter from VTB Chairman Andrey Kostin dated June 26 made the case for why the Kremlin should give VTB the go-ahead for its plan, which would weaken leading Russian grain traders. VTB and the Kremlin did not respond to requests for comments about the letter.
Commodity traders Glencore PLC and Trafigura have picked up a combined 70,479 tonnes of aluminium over the past week by winning online auctions of metal inventory dating back to China's 2014 Qingdao warehousing scandal, according to the e-commerce platform that hosted the sales. Glencore won an auction for aluminium ingots on Friday, bidding 485.43 million yuan ($68.55 million) for eight consignments totalling 39,745.76 tonnes, all of which entered storage in 2013 or 2014, according to a notice on JD.com.
(Bloomberg) -- The Chinese operator of the Democratic Republic of Congo’s largest copper producer has told employees that it’s struggling to make money as the collapse of cobalt and copper prices hits miners in the country.China Molybdenum, which operates the giant Tenke Fungurume mine, said falling metal prices combined with higher taxes and royalties, and rising costs meant it was now in a “deficit zone.” The company said it had also been hit by problems with production equipment.“In the first half, the company did not achieve its production targets,” its Tenke Fungurume Mining unit said in the letter seen by Bloomberg News. “In addition, the metal prices, copper and cobalt, are at the lowest level. The company is in a deficit zone.”China Molybdenum’s warning to employees comes as Congo’s entire extractive industry is under pressure after a revised mining code was signed into law in March last year, raising taxes and canceling a clause that would have protected producing mines against fiscal changes for another decade. The government then imposed a 10% royalty tax on cobalt producers eight months later.Glencore Plc said earlier this month that it will shutter its Mutanda project for about two years in a bid to put a floor under the cobalt market, which has seen prices fall more than 70% since April last year.Cobalt CollapseThose setbacks highlight how quickly cobalt has shifted from a prized asset to a headache. After quadrupling in two years, prices have collapsed to the lowest since 2016 as new supplies pour into the market. The copper price has dropped by about 5% over the past year.“Despite the adverse environment and difficulties painted above, in order to preserve jobs and keep current benefits, the new management team, with the support of shareholders, has developed a business revitalization and development plan to face the risks,” China Molybdenum’s unit said.The Financial Times earlier reported that the company had sent a letter to employees.To contact the reporters on this story: William Clowes in Kinshasa at firstname.lastname@example.org;Thomas Biesheuvel in London at email@example.comTo contact the editors responsible for this story: Lynn Thomasson at firstname.lastname@example.org, Dylan GriffithsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
BP and Glencore are struggling to sell around 600,000 tonnes of tainted Russian oil more than three months after the contamination was discovered, according to six trading sources. Russia's oil industry was plunged into a crisis in April after about 5 million tonnes of oil for export was found to be contaminated with organic chloride, a chemical used to help boost oil extraction but which can damage refining equipment. Exports through the Druzhba pipeline that transports oil to Germany, Poland, Hungary, Slovakia, the Czech Republic, Ukraine and Belarus were halted.
(Bloomberg Opinion) -- All major miners agree that copper has a bright future. The trouble is how to get at it. Take BHP Group, set to be the world’s biggest producer this year after Freeport-McMoRan Inc. sold down its stake in Indonesia’s Grasberg mine. Costs at BHP’s massive Escondida pit in Chile, which accounts for about one in 20 tons of copper mined globally, keep on disappointing. They’ll rise from the current $1.14 a pound to a range of $1.20 to $1.35/lb next year, the miner said in annual results Tuesday, well above its ambitions to keep them shy of $1.15/lb.When the copper price is trading close to three-year lows at $2.61/lb, that still makes for a pretty profitable business. But with production for the whole copper business seemingly capped at around 1.75 million metric tons a year, it isn’t clear where volume growth will come from. Miners love copper because it’s seen as a way to make a bet on a clean-energy future. Electric cars contain between four and 10 times as much copper as conventional ones, and wind and solar generators are forecast to consume 813,000 tons annually by 2027. It’s not clear that projects currently in the pipeline will be sufficient to produce enough metal to keep the market supplied once those sources of demand start ramping up around the middle of the next decade.BHP’s main expansion at the moment is an extension of its Spence mine in Chile, which is set to go into production by December next year. That should add about 185,000 tons of annual production – barely enough to offset the the gradual exhaustion of the Cerro Colorado and Antamina pits, which have less than a decade of reserve life left in them.Beyond that is the potentially massive, geologically difficult expansion of South Australia’s Olympic Dam mine. That pit has long been a challenge. Its significant uranium content would make BHP a major and low-cost producer of the atomic fuel. The risk, though, is that such a large influx of supply would crash the uranium oxide market and weaken the high-stakes economics of the project itself. In theory, there ought to be interesting opportunities for M&A in the current environment. Freeport, for instance, could almost double BHP’s copper production, and has a lot less political risk attached now the long tussle with Jakarta over Grasberg is over.With return on capital employed of about 11%, it’s outperforming the underlying 6% return in BHP’s copper business and could be bought for about nine months’ cashflow. But with Elliott Management Corp. still a lingering presence on the shareholder register, management are unlikely to want to do anything too splashy. Indeed, BHP’s rivals are prime examples of the risks that can be run from being too bold around copper. Rio Tinto Group’s Oyu Tolgoi mine in Mongolia could cost as much as $1.9 billion more than forecast, with first production from the expanded project delayed until the middle of 2023, the company said last month. Glencore Plc this month announced plans to shut its Mutanda copper mine in the Democratic Republic of Congo due to rising costs and weak pricing for cobalt, an important by-product from the operation.There may be a lesson in that. For all the billions BHP has spent on copper over the past decade, its returns from the red metal are still among the worst in the group. Rather than chasing volume, it might be better off watching the pennies, letting the market tighten and hoping prices rise to justify the money that’s already been spent. When the cards on the table look weak, there are worse things to do than just stand pat.To contact the author of this story: David Fickling at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.