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Glencore

Glencore Makes a $36 Billion Bet on Dirty Coal – by Chris Bryant (Bloomberg News – December 4, 2018)

https://www.bloomberg.com/

CEO thinks shareholders are missing the picture on Glencore’s strong cash flow. If you’re happy with investing in coal, he may have a point.

Higher U.S. bond yields have made the payouts offered by most stocks look pretty underwhelming lately. Not so Glencore Plc, whose implied yield is startlingly high even though it’s throwing off cash like it’s going out of fashion.

The miner-cum-trader thinks it can generate $7.5 billion of free cash flow next year at current commodity prices. Absent a downturn in the economy, it’s conceivable that the company will return all of that to shareholders via dividends and buybacks, it said on Monday. Here’s the relevant slide:

The market shrugged at its largess, even erasing some of the gains Glencore had enjoyed from the easing of U.S.-China trade tensions. The shares have dropped more than 21 per cent this year and trade on less than 8 times estimated earnings.

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NEWS RELEASE: VALE AND GLENCORE TO INITIATE JOINT FEASIBILITY STUDY TO POTENTIALLY DEVELOP RESOURCES ACCESSIBLE FROM NICKEL RIM SOUTH MINE

SUDBURY, December 4, 2018 – Today, Vale and Glencore announced that they are entering into an agreement to facilitate a joint Feasibility Study to explore the possibility of developing and mining resources at depth accessible from the existing workings of Glencore’s Nickel Rim South Mine.

The Study will examine the economic and technical feasibility of using the existing shaft and infrastructure at Glencore’s Nickel Rim South Mine, as well as additional underground infrastructure, to potentially jointly develop and mine deposits in very close proximity to each other. This includes Vale’s Victor property and a shared deposit which exists adjacent to the boundary between each Company’s properties.

“A joint approach could allow for resources to be unlocked that would likely not otherwise be productive,” said Ricus Grimbeek, Chief Operating Officer, Vale’s North Atlantic Operations and Asian Refineries. “Assuming a successful outcome to our Study, this synergy could also lead to significant value generation – including job creation – at a time when the medium to long-term market outlook for both nickel and copper looks very promising,” he added.

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Glencore’s billionaire copper chief retires under legal pressure – by Jack Farchy and Mark Burton (Bloomberg News – December 3, 2018)

https://www.bloomberg.com/

LONDON – Glencore on Monday announced the retirement of-billionaire Aristotelis Mistakidis, its embattled head of copper trading and one of the company’s biggest shareholders.

Mistakidis’s departure marks the end of an era. The 56-year-old executive is one of the world’s most powerful commodities traders and built Glencore’s reputation as a dominant force in copper. But he’s come under intense pressure recently following a string of investigations, problems and legal headaches.

The US Department of Justice is probing Glencore’s dealings in the Democratic Republic of Congo, one of the poorest and most corrupt countries in the world. Canadian regulators are also investigating accounting irregularities at copper mines where Mistakidis was a director.

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Trouble in the Congo: The Misadventures of Glencore – by Franz Wild, Vernon Silver and William Clowes (Bloomberg News – November 16, 2018)

https://www.bloomberg.com/

What a time to own the world’s most valuable cobalt mine, and to have to fight to keep it.

A dozen years ago the future of technology bounced out of a remote corner of Africa on the back of a truck, along with a world of potential trouble. Both, embodied in the same load of rock, landed in the hands of Ivan Glasenberg, chief executive officer of Glencore Plc, the world’s largest middleman for the raw materials that fuel, feed, and underpin civilization.

Glasenberg’s obsession was copper, because China’s appetite for it was insatiable, with copper wire electrifying the nation’s rising cities and running through the appliances its factories sold to the West. The metal’s price had quadrupled in less than three years, triggering a global frenzy. Miners blasted it from Chilean mountaintops and dug it from the African earth as fast as they could.

At a processing plant in Zambia, Glencore was buying up all the ore containing copper it could get its hands on when technicians noticed something extraordinary. One trader consistently rolled in with rocks showing levels of purity that were off the charts—not just for copper, but also for the blue metal cobalt.

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Generations Of Miners Face The Future Of Automation Deep Underground – by Mary Katherine Keown (HuffPost Canada/Thet Canada.com – November 13, 2018)

https://www.thetcanada.com/

A proud third-generation miner, Mickey O’Brien enjoys the every day grind of taking that deep dive to the centre of the earth. A miner at Vale’s Copper Cliff Mine in Sudbury, Ontario, O’Brien works 10-hour shifts. After suiting up and assembling, he and his coworkers break into a number of crews to start the new and soiled process of gnawing away on the earth greater than 1.5 km underground.

“I am on haulage,” O’Brien says. “Proper now I am driving a grader, however I am being skilled on a picker, so if we’ve massive chunks after a blast, the news will put them apart and I drill holes in them and I blow them up, and the news will come and decide them up. Cool, eh?”

A proud labour rights activist, he considers a lot of his colleagues — most of whom are members of Steelworkers Native 6500 — to be brothers and sisters. “I have been engaged on Inco property since I used to be 18 and I am 38 now,” he says, referencing the title of his firm earlier than it was purchased out by Vale in 2006.

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BHP’s ‘measured creep’ of risk appetite – by Matthew Stevens (Australian Financial Review – November 11, 2018)

https://www.afr.com/

Ivan Glasenberg wondered recently how it was the BHP had moved into mining frontier of Ecuador when management at Australia’s Smart Thinking resources house was supposedly content to sustain and grow its business around its existing sites. This bemusement is well founded.

Among the themes consistent through Andrew Mackenzie’s evolving reformation of BHP are that it has little or no appetite for investment in frontier opportunities and that the company’s growth aspirations will be best afforded through a laser focus on the Global Australian’s existing six-strong fleet of mega-resource basins.

But that message is in the process of being massaged into something more nuanced, and not just because BHP’s two-stream play to possibly shape Ecuador’s future in copper stands an obvious test of the past house line in emerging mining sovereignties.

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COLUMN-Glencore’s radioactive shock for the cobalt market – by Andy Home (Reuters U.S. – November 9, 2018)

https://www.reuters.com/

LONDON, Nov 9 (Reuters) – Glencore’s Katanga mine in the Democratic Republic of Congo (DRC) was supposed to transform the cobalt market. After two years of being offline, Katanga’s ramp-up was going to add 11,000 tonnes to global supply this year. The surge, equivalent to 10 percent of world production last year, would flip the global market from supply shortfall to surplus.

That was the idea anyway. Katanga’s cobalt, however, has turned out to be radioactive. Glencore’s operating subsidiary, Katanga Mining, has found uranium with “low levels of radioactivity” in its cobalt hydroxide product.

Not enough to pose a health and safety scare, but enough to prevent the material being handled by ports. Katanga will keep producing but it has suspended cobalt sales until it has built an ion-exchange plant to remove the uranium.

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[Glencore] Old mine set to become tech vanguard for Sudbury-based corporation – by Karen McKinley (Northern Ontario Business – November 9, 2018)

https://www.northernontariobusiness.com/

Onaping Depth touted by Glencore as future of deep mining with all battery-electric operation

The Craig Mine-Onaping Depth Project is not only becoming a reality, but it will also have the distinction of being the first mine to be completely battery-electric, even if it means building equipment that doesn’t exist, yet.

It’s also a melding of old and new, with the previous mine’s infrastructure being used to transport equipment and personnel to the deposit.

Peter Xavier, vice-president of Glencore’s Sudbury Operations, gave an overview of the company, with a focus on the company’s mine project, at a Greater Sudbury Chamber of Commerce luncheon on Nov. 6.

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Editorial: Kamoto halt highlights cobalt’s unpredictability – by John Cumming (Northern Miner – November 8, 2018)

Northern Miner

Anyone needing a reminder of the tenuousness of the global cobalt market — which plays a major role in underpinning the global boom in electric vehicles (EVs) — need only look at the stark news on Nov. 6 that Glencore’s 75%-owned subsidiary Katanga Mining has suspended sales from its large Kamoto cobalt-copper mining complex in the Democratic Republic of the Congo (DRC), owing to uranium contamination of cobalt concentrates destined for export.

At press time on the day of the news, Katanga Mining shares closed down 23% to 49¢, compared to a multi-year peak of $2.67 on Jan. 3, 2018. Likewise, Glencore shares dropped 2.9% on the news in London trading.

Located in the DRC’s Kolwezi district, Kamoto had been slated to become the world’s largest cobalt mine during 2019 — cementing Glencore’s position as the world’s largest cobalt producer.

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Glencore’s Radioactive News May Help Give Cobalt Its Buzz Back – by Jack Farchy, Thomas Biesheuvel and Mark Burton (Bloomberg News – November 7, 2018)

https://finance.yahoo.com/

(Bloomberg) — Glencore Plc’s sudden discovery that some of its cobalt is radioactive couldn’t come at a better time.

After a surge in prices last year, enthusiasm for cobalt has been fading, partly because of a surge in new supply. But sentiment could be changing after Glencore’s unit in the Democratic Republic of Congo suspended cobalt sales after detecting low levels of radioactivity.

“It’s nice to finally have some positive news in the market,” Gordon Buchanan, a senior trader at Stratton Metal Resources, said by phone from London.

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Glencore to go deeper at Sudbury operations – by Jim Moodie (Sudbury Star – November 7, 2018)

https://www.thesudburystar.com/

“We have still, I believe, a lot of untapped potential in the Sudbury
basin, especially at depth,” said Xavier. A series of deep copper
deposits dubbed Norman West is particularly intriguing to the company.

Xavier also highlighted the strides the company has taken to reduce its emissions,
which have dropped 90 per cent over the past 30 years, while production has climbed.
And he noted Glencore has spent $272 million on a Process Gas Project at its smelter,
which will further reduce sulphur dioxide emissions.

“We’re committed to a long, stable future in Sudbury,” he said.
(Peter Xavier, VP of Sudbury Integrated Nickel Operations – Glencore)

Cleaner. And deeper. That’s the direction Sudbury Integrated Nickel Operations (Glencore) is heading with its existing properties, a new nickel mine in the Onaping area and copper deposits it hopes to develop north of Capreol.

“Deep mining is where the future lies for us,” said Glencore VP Peter Xavier during an address to a Greater Sudbury Chamber of Commerce audience Tuesday. “After 100 years of mining in the Sudbury basin, you can imagine a lot of the close-to-the-surface operations are getting depleted, and we’re having to go deeper.”

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Throwback Thursday: A brief history of mining in Sudbury Northern Life – by Callam Rodya(Sudbury.com – March 2, 2017)

https://www.sudbury.com/

With two of Sudbury’s most important employers, Vale and Glencore, reporting healthy profits last week, we asked the Greater Sudbury Archives to dust off some old footage and photos from the earlier days of this fledgling industry, to give you a brief history of mining in Sudbury.

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Glencore posts rise in copper, cobalt output on Katanga restart (Reuters U.S. – October 26, 2018)

https://www.reuters.com/

(Reuters) – Glencore Plc on Friday reported a 12 percent rise in copper production so far this year, while cobalt production rose 44 percent, boosted by the restart of Katanga’s processing operations in the Democratic Republic of Congo.

The London-listed miner and commodities trader, which posted record half-year earnings in August, said then it had been facing higher costs and weak prices for cobalt and other byproducts.

Glencore’s copper production rose by 116,600 tonnes to 1,063,100 tonnes from the start of this year and cobalt output jumped 8,700 tonnes to 28,500 tonnes.

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Exclusive: Justice Department demands details from Glencore on intermediary firms – sources – by Dmitry Zhdannikov and Julia Payne (Reuters U.S. – October 23, 2018)

https://www.reuters.com/

LONDON (Reuters) – The U.S. Department of Justice is seeking documents from Glencore about intermediary companies that the commodities firm has worked with in the Democratic Republic of Congo, Venezuela and Nigeria, sources familiar with the matter said.

The investigation is not directed at Glencore’s own activities or its senior executives, two sources told Reuters, giving no further detail about the type of information sought.

“The investigation focuses on intermediaries,” one source familiar with the probe said. A banker working with Glencore also said the focus was on three intermediary firms.

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Glencore CEO Tells Investors He’ll Retire in 3 to 5 Years – by Jack Farchy, Javier Blas and Thomas Biesheuvel (Yahoo Finance/Bloomberg – October 22, 2018)

https://finance.yahoo.com/

(Bloomberg) — Ivan Glasenberg, who built Glencore Plc into a dominant force in commodities trading and became the face of the industry, told investors he plans to retire in three to five years, according to people familiar with the matter.

Glasenberg discussed his succession plan in recent meetings and said he has started training three to four front runners as the next chief executive officer, said the people, who asked not to be identified because the conversations were private. Glasenberg, who turns 62 in January, anticipates retiring between the ages of 65 and 67, and believes the next leader should come from a younger generation, the people said. A spokesman for Glencore declined to comment.

The comments put a timeline on the chief executive’s exit for the first time and force investors to consider what had long seemed unthinkable: a Glencore without Glasenberg. The brash, workaholic South African started his career at Glencore more than three decades ago, and has held the top job since 2002.

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