Miners’ Window Display Gathers Dust – by David Fickling (Bloomberg News – February 17, 2016)


Putting a `For Sale’ label on a product and displaying it in your store window is pretty easy. Replacing it with a `Sold’ sticker is much harder.

That’s not likely to be news to Anglo American, which Tuesday fleshed out plans to sell coal, iron ore, nickel, niobium, phosphate and platinum mines to cut its $13 billion in debt. But it’s good reason to question whether Chief Executive Officer Mark Cutifani will hit his target of raising some $3 billion to $4 billion from the assets this year.

Mines can go unsold for an astonishingly long time. Anglo’s niobium and phosphate assets, which Cutifani now expects to dispose of within two to three months, were first earmarked for sale all the way back in 2009. A suite of Rio Tinto’s aluminum operations in Australia and New Zealand were put to market in October 2011.

They didn’t attract any acceptable bids and were finally reintegrated nearly two years later. BHP Billiton put up the shingle on its Nickel West unit in May 2014. There was so little appetite that the business didn’t even make it into South32, the spin-off that BHP set up last year to hold its frumpier mines.

It now languishes as a “non-core” unit along with a U.S. coal mine and half-a-dozen or so oilfield stakes.ANGLO’S NET DEBT AS OF DECEMBER$12.9 billionIt’s always possible to sell something if you’re flexible enough about price. That’s the rub, though: If you want to raise as much as $4 billion of cash and avoid too many further writedowns, your room to maneuver may be limited.

For the rest of this article, click here: http://www.bloomberg.com/gadfly/articles/2016-02-17/no-one-wants-to-buy-what-mining-companies-are-selling

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