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Posts: 261
Opinion: No Opinion
Posted: May 8, 2019

Big Four miners languish

Big Four miners languish amid demand, ESG, capex concerns

LONDON (Reuters) - The world’s biggest diversified miners have yet to see their share prices reflect their role as providers of the minerals needed for a shift to a low-carbon economy.

Mining companies provide minerals such as cobalt used in electric vehicle batteries and copper for increased electrification, and the sector’s balance sheets are in rude health.

Still, many investors are wary. Concerns include the demand outlook from China, the world’s biggest consumer of metals; the sector’s history of wasting shareholders’ money on mergers and acquisitions that never deliver returns; and a patchy record on environmental, social and governance-related (ESG) issues.

Reminders of the dangers include a disaster in Brazil at a Vale tailings dam in January that killed an estimated 300 people, and a U.S. corruption investigation into Glencore, announced in April.

Refinitiv data shows the Big Four diversified miners - Rio Tinto, BHP, Anglo American and Glencore - trading at a lower forward 12-months price-to-earnings multiple than Britain’s FTSE 100.

“All the large mining companies are trading on high free cash flow yields relative to the broader market when you adjust for capital spending on growth projects,” said Nick Stansbury, head of commodity research at Legal & General Investment Management (LGIM).

“This is indicative of the market’s scepticism about the sustainability of those cash flows, the robustness of capital allocation by management and the sector’s challenges around ESG issues.”

James Clunie, fund manager at Jupiter Fund Management, which holds shares in Rio Tinto and BHP, agreed uncertainty around medium-term commodity prices was a deterrent.

“A whole class of people say ‘I’m out’ because of that uncertainty, and that leads to (the stocks’) undervaluation,” he said.

(Graphic: Valuations of the world's top diversified miners png, tmsnrt.rs/2GSdAlN)

For an interactive version of the graphic, click here tmsnrt.rs/2GSDbei.

The same attitude is reflected in the ratings given to the four companies by brokers, with most favouring a fence-sitting “hold” recommendation.

(Graphic: UK mining's 'Big 4' - what do the analysts say? png, tmsnrt.rs/2DIaWgl)

For an interactive version of the graphic, click here tmsnrt.rs/2DIaVsN.

On the flipside, others focus on how the miners have transformed their balance sheets and improved governance.

“Compared to the past, the resources sector is carrying a fraction of the leverage it used to, which should reduce the volatility of the shares,” Evy Hambro, manager of the world’s largest actively managed mining equity fund, BlackRock’s BGF World Mining Fund, told Reuters.

“In addition, the improved capital discipline combined with lower levels of reinvestment has increased the free cash flow available to shareholders and resulted in rising distributions to shareholders.”

BlackRock is the world’s largest money manager, with some $6 trillion in assets. Hambro manages a combined $11.9 billion across several funds.

(Graphic: Rio Tinto - key financial metrics png, tmsnrt.rs/2VDAwgO)

For an interactive version of the graphic, click here tmsnrt.rs/2VEal9z.

(Graphic: BHP Group - key financial metrics png, tmsnrt.rs/2DUpEBh)

For an interactive version of the graphic, click here tmsnrt.rs/2DHI9sc.

(Graphic: Anglo American - key financial metrics png, tmsnrt.rs/2VG8AsA)

For an interactive version of the graphic, click here tmsnrt.rs/2VG8y3W.

(Graphic: Glencore - key financial metrics png, tmsnrt.rs/2VJ0She)

For an interactive version of the graphic, click here tmsnrt.rs/2VIClZK.

LGIM’s Stansbury said the sector was wrestling with several paradoxes.

“They are one of the most crucial industries in the fight against climate change,” he said, referring to the minerals they can produce to roll out electrification and renewable energy.

But extracting those minerals results in high levels of emissions, volumes of water consumption and fatalities, despite promises from major miners to eliminate harm.

Mining can also lift large numbers of people out of poverty by providing well-paid jobs and helping to roll out electrification in emerging economies, but operating in the fragile democracies where some of the richest resources are found can expose miners to corruption allegations.

“It is essential the sector makes further progress on transparency and corruption. Investors need to be confident that the government take from resource extraction is used for the benefit of the local population,” Stansbury said.

Another concern is that the sector’s financial health could be setting it up for a fall.

“Counterintuitively the risks around misallocation of capital are greater now that the sector has largely resolved their balance sheet problems,” Stansbury said.

“At the bottom of the last cycle the sector just didn’t have the money to spend unwisely on bad projects. Now they do, so it’s no surprise that these concerns are rising again in investor’s minds.”

Posts: 261
Opinion: Buy
Posted: February 1, 2019

Glencore says 2018 output boosted by restart of Ka

Glencore says 2018 output boosted by restart of Katanga unit

LONDON (Reuters) - Miner and trader Glencore said on Friday cobalt production in 2018 soared 54 percent while copper output rose 11 percent due to the restart of operations in the Democratic Republic of Congo.

The London-listed company stuck to its 2019 production guidance set out in an update to investors in December.

Production of cobalt, used in batteries for electric vehicles, reached 42,200 tonnes in 2018 while copper hit 1.453 million tonnes.

Glencore’s Katanga Mining unit in Congo ramped up in late 2017.

Posts: 261
Opinion: Buy
Posted: December 3, 2018

GLEN Investor update call + management changes

RNS Number : 2467J
Glencore PLC
03 December 2018

Glencore plc

Baar, Switzerland

3 December, 2018

Glencore investor update call and management changes

Today, Glencore is hosting an investor update call at 13:00 (UK). Presentation slides will be available from 12:00 (UK).

Glencore is announcing the following management changes:

- Peter Freyberg appointed as Head of Industrial Mining Assets - a newly created position with oversight and responsibility for all of Glencore's Industrial Mining Assets.

- Gary Nagle appointed as Head of Coal Assets. Japie Fullard appointed Head of Ferroalloys Assets.

- Telis Mistakidis to retire as Head of Copper Marketing at the end of the year. Nico Paraskevas appointed Head of Copper Marketing.

- Stuart Cutler to retire as Head of Ferroalloys Marketing at the end of the year. Jason Kluk and Ruan Van Schalkwyk appointed as Joint Heads of Ferroalloys Marketing.

Further detail will be provided on the investor update call.

Details of the call and presentation material are available on our website at http://www.glencore.com/investors

Webcast

A live audio webcast of the presentation starting at 13.00 (UK) time will be accessible at: https://edge.media-server.com/m6/p/97fmh4a3

The webcast will be archived on our website within 24 hours of the presentation ending.

Dial-in details

Please dial in 15 minutes prior to the start time using the number / conference ID below:

Confirmation Code: 6865955

London, United Kingdom: +44 (0)330 336 9411

National free phone - United Kingdom: 0800 279 7204

Johannesburg, South Africa: +27 11 844 6118

National free phone - South Africa: 0800 980 520

Hong Kong, Hong Kong: +852 3018 4588

National free phone - Hong Kong: 800 961 384

New York, USA: +1 929-477-0448

Toronto, Canada: +1 647 794 4605

National free phone - USA/Canada: 888-254-3590

Sydney, Australia: +61 (0)2 9193 3761

National free phone - Australia: 1 800 820 237

Geneva, Switzerland: +41 (0)22 567 5750

National free phone - Switzerland: 0800 222 801

A replay of the call will be available on 3 December until 1 January 2019.

Replay Passcode: 6865955

London, United Kingdom: +44 (0) 207 660 0134

Johannesburg, South Africa: +27 11 062 3065

Hong Kong, Hong Kong: +852 3008 0334

Geneva, Switzerland: +41 (0) 22 567 5709

New York, USA: +1 719-457-0820

Toronto, Canada: +1 647-436-0148

Sydney, Australia: +61 (0) 2 9101 1954

Posts: 20
Opinion: Buy
Posted: September 13, 2018

Tribunal approves Glencore's bid for Chevron asse

South Africa's Competition Tribunal on Thursday conditionally approved Glencore's proposed $973 million acquisition of Chevron Corps subsidiary in the country, all but scuppering a rival bid from China's Sinopec.

Chevron agreed last year to sell its 75 percent stake to state-owned Sinopec, before miner and commodities trader Glencore swooped in after reaching a deal with minority shareholders, who backed it and exercised preemptive rights on the sale.

The assets include a 110,000 barrel-per-day oil refinery in Cape Town, a lubricants plant in Durban as well as 845 service stations and other oil storage facilities. It also includes 220 convenience stores across South Africa and Botswana.

Glencore is providing funding to, and making its bid through, its Black Economic Empowerment partner Off The Shelf Investments (OTS), a minority shareholders' group, which already owns virtually all the remaining shares in Chevron SA.

South Africa's competition watchdog approved the bid in August, but the Competition Tribunal makes the final ruling on deals.

Sinopec's bid was also approved by the competition authorities but the Tribunal said Glencore-backed OTS had right of first refusal to close the transaction.

The conditions for the proposed merger included the preservation of jobs after the deal and the continuation of CSA retirees' medical aid subsidy among others, it said. (Reporting by Shashwat Awasthi in Bengaluru; Editing by Kirsten Donovan)

Posts: 261
Opinion: Sell
Posted: July 3, 2018

Subpoena from United States Department of Justice

RNS Number : 3926T
Glencore PLC
03 July 2018

Glencore plc

Baar, Switzerland

3 July, 2018

Subpoena from United States Department of Justice

Glencore Ltd, a subsidiary of Glencore plc, has received a subpoena dated 2 July, 2018 from the US Department of Justice to produce documents and other records with respect to compliance with the Foreign Corrupt Practices Act and United States money laundering statutes. The requested documents relate to the Glencore Group's business in Nigeria, the Democratic Republic of Congo and Venezuela from 2007 to present.

Glencore is reviewing the subpoena and will provide further information in due course as appropriate.

Posts: 261
Opinion: No Opinion
Posted: June 13, 2018

Katanga Mining announces settlement of DRC

RNS Number : 1870R
Glencore PLC
13 June 2018

Glencore plc

Baar, Switzerland

12 June, 2018

Katanga Mining announces settlement of DRC Legal Dispute with Gécamines and Agreement for the Resolution of KCC's Capital Deficiency

Glencore refers to the announcement today by Katanga Mining Limited ("Katanga") in which it announced the settlement of the DRC legal dispute with La Générale des Carrières et des Mines ("Gécamines") and an agreement for the resolution of the capital deficiency at Katanga's 75% owned DRC operating subsidiary Kamoto Copper Company ("KCC").

Glencore is pleased that this matter has now been resolved and looks forward to supporting KCC's closer partnership with Gécamines as the parties work together to ensure that the Joint Venture reaches its full potential for the benefit of all stakeholders.

The key highlights of Katanga's settlement agreement with Gécamines are as follows:

· Conversion of US$5.6 billion of KCC's total debt of approximately US$9 billion into new KCC equity such that, with retroactive effect as at January 1st, 2018, KCC has $3.45 billion of debt to KML Group, bearing interest at the lower of US$ Libor 6 month + 3% and 6% per annum;

· Katanga and Gécamines' shareholdings in KCC remain unchanged at 75% and 25% respectively;

· a one-time payment to Gécamines of US$150 million relating to historical commercial disputes;

· certain amendments to the dividend payment and free cash flow provisions of KCC including an amortization schedule for the repayment of the residual debt;

· payment of approx. $US 41 million to Gécamines in relation to outstanding expenses incurred as part of an exploration program;

· waiver by KCC of its entitlement (or financial equivalent) to replacement reserves and associated incurring of drilling costs on Gecamines' behalf, amounting to US$285 million and US$57 million respectively, and

· withdrawal of all legal action by Gécamines.

Other key terms are detailed in the Katanga press release at the following link: http://www.katangamining.com/media/news-releases/2018.aspx.

The entry of the settlement agreement between Katanga and Gécamines constitutes a smaller related party transaction as defined in Listing Rule 11.1.10 because Gécamines holds more than 10% of the voting rights in a material subsidiary of Glencore. Accordingly, as a condition precedent to the Settlement Agreement becoming effective, Glencore must obtain written confirmation from a sponsor that the terms of the Settlement Agreement with Gécamines are fair and reasonable as far as the shareholders of Glencore are concerned. Glencore aims to obtain such written confirmation on or before 14 June, 2018.

Posts: 18
Opinion: Sell
Posted: May 21, 2018

Possible SFO investigation into Glencore?

Glencore on Friday said it could not comment on a report by Bloomberg that it may face an enquiry from Britain's Serious Fraud Office into allegations of bribery linked to its operations in Democratic Republic of Congo.

Watch out for increased shorts.