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Glencore Emerging A Big Winner From Coal Consolidation – Tim Treadgold (Forbes Magazine – October 12, 2018)

https://www.forbes.com/

Tim Treadgold has been writing about the mining and oil industries for more than 40 years.

The inconvenient truth of coal prices which refuse to fall as demanded by environmental activists and some investors and governments is proving to be a rather convenient fact for one of the world’s biggest mining and commodity trading companies, Glencore.

While other big miners have been selling coal assets Glencore has been buying and if recent indications are correct it now controls enough of the seaborne coal market to have a noticeable effect on price.

An example cited in a research report published this week was how Glencore was able to delay settlement in annual coal-price negotiations with Japanese buyers in order to win a higher price.

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The Real Cash Cow in Mining Isn’t Metals. It’s Bad Old Coal – by Thomas Biesheuvel (Bloomberg News – October 10, 2018)

https://www.bloomberg.com/

For all the bullish talk about metals of the future, miners are making some of their biggest profits from heavy-industry stalwart coal.

Base metals from copper to zinc have tumbled this year, caught up as a proxy for trade fears and emerging market jitters. Meanwhile, coal has ground steadily upwards, supported by strong demand from top commodities user China, and is trading near the highest in more than six years.

That’s translating into big paydays for producers. Glencore Plc is in touching distance of seeing its coal mining profits eclipse copper earnings this year for the first time since it sold shares in London in 2011.

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Is the Reign of Glencore’s Billionaire Copper King Near Its End? – by Jack Faerchy (Bloomberg News – October 9, 2018)

https://www.bloomberg.com/

Aristotelis Mistakidis is one of the world’s most powerful commodity traders. For nearly 20 years, the brash, hyperactive Greek known to everyone simply as “Telis” has ruled over the global copper market, buying and selling enough of the red metal to supply every factory in the U.S. twice over.

Today, the man who built Glencore’s reputation in copper is facing tough questions about how he did it. Mistakidis, who until recently ran both copper trading and mining, is under intense pressure after a string of investigations, problems and legal headaches.

The U.S. 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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The Metal That Started Trump’s Trade War – by Matthew Philips and Joe Deaux (Bloomberg News – October 1, 2018)

https://www.bloomberg.com/

The president’s aluminum tariff is bad for America—and great for Switzerland’s Glencore.

Working at the Century Aluminum Co. smelter in Hawesville, Ky., can be like having a job in an oven. The interior temperature hovers around 140F, which isn’t necessarily hotter than, say, your typical steel mill. What’s especially hellish about an aluminum smelter is how close you have to stand to bubbling vats of molten, electrified metal.

Workers wear helmets, masks, and heavy, fire-retardant clothing. They look like smoke jumpers. Over a 12-hour shift they’ll lose several pounds of water weight as they peer over cauldrons, occasionally stirring 1,700-degree liquid aluminum with long metal rods.

They wear earplugs against the hum of 170,000 amps surging through the mixture, which chemically breaks down ore. The air itself feels charged—and smells like the blended aromas of an overheated car engine and a sweaty fistful of coins. If you breathe through your mouth, you can taste the metal on your tongue.

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Glencore awards Onaping Depth contract to Cementation Canada – by Staff (Sudbury Star – September 19, 2018)

https://www.thesudburystar.com/

Canada Inc. said Tuesday it has been awarded the design and construction of the new internal underground shaft for the Onaping Depth Project at Craig Mine. The mine is part of Glencore’s Sudbury Integrated Nickel Operations (Sudbury INO).

“Onaping Depth has been an iconic project for us and we have worked very closely with Sudbury INO over the years to evaluate and provide the shaft designs and methodology that combine safety with value,” Roy Slack, president of Cementation Canada, said in a release. “We are thrilled that the project is going ahead and are very excited to be Sudbury INO’s main contractor and design engineer for this shaft project.”

Cementation Canada did not say how much the contract was worth. Glencore, however, has freed up $700 million for Onaping Depth. Production at Onaping Depth expected to begin in 2023 — and go fully online by 2025.

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Glencore unperturbed by hostility to coal as price rises 21% in a year – by David McKay (MiningMX.com – September 3, 2018)

MiningMX.com

THE condemnation of companies with significant exposure to fossil fuels is steadily growing with banks, institutional investors, and even the companies engaged in coal mining, for instance, beginning to turn their backs on a fuel that once stoked the fires of enrichment.

Not so for Ivan Glasenberg, CEO of Glencore. His company may be facing a potential US Department of Justice investigation for business activities in districts as far apart as Venezuela and Nigeria, relating to another fuel, oil, but Glencore’s eye remains fixed on thermal coal. Why? It makes good money and right now, it makes lots of it especially as even European coal prices hit $100/t – the highest since 2013.

At $115/t currently, the price of thermal coal is 21% higher year-on-year. Metallurgical coal prices 11% lower year-on-year but are still at about $180/t.

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Conference board report projects modest growth for Sudbury – by Mary Katherine Keown (Sudbury Star – August 23, 2018)

https://www.thesudburystar.com/

A new report from the Conference Board of Canada says Sudbury is looking at modest growth for the rest of 2018 and into 2019.

Things are looking up in the Nickel City, thanks in large part to our namesake mineral. The Conference Board of Canada released its Metropolitan Outlook Wednesday, detailing economic forecasts for 16 medium-sized cities.

Greater Sudbury will see modest growth throughout 2018-19. But with unemployment set to spike temporarily, it is not all good news.

“Greater Sudbury’s real GDP growth will hit 1.2 per cent in 2018 and a similar 1.1 per cent in 2019,” the report notes.

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Electric cars: the race to replace cobalt – by Henry Sanderson (Financial Times – August 20, 2018)

https://www.ft.com/

Manufacturers want batteries that are not dependent on metals from unstable parts of the world

In a laboratory on an industrial park an hour’s drive outside Boston, Tufts professor Michael Zimmerman is hoping a material he invented in his basement can help solve a crisis facing the electric car industry — which has inadvertently tied its fortunes to one of the poorest and least stable countries in the world.

In between his teaching, Mr Zimmerman runs start-up Ionic Materials, whose battery material could mark the future for the car industry as it races to go electric after a century of producing petrol cars. His hope is that his homegrown prototype could pave the way for a new generation of batteries that does not use cobalt, a silver-grey metal, more than 60 per cent of which is mined in the Democratic Republic of Congo.

Backed by highly respected computer scientist and investor Bill Joy, who spent years searching for the perfect battery, Ionic counts the Renault Nissan Mitsubishi carmaker alliance, Hyundai and French oil company Total among its shareholders.

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Ex Glencore bosses try to snatch nickel asset – by Sarah Thompson and Anthony Macdonald (Australian Financial Review – August 19, 2018)

https://www.afr.com/

Mining giants Glencore and Barrick could have a prospective nickel and cobalt project taken from under their nose, if plans being hatched by ASX-listed Jervois Mining come to fruition.

As first reported by Street Talk on Sunday, Jervois has been making moves to win control of the Kabanga nickel and cobalt project in Tanzania, after the host government cancelled Glencore and Barrick’s joint hold of it in January.

The January cancellation was part of a broader push by the government to get a bigger share of its mineral wealth, but Glencore and Barrick have been upbeat in recent times about their chances of winning a fresh permit to explore and develop the asset.

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Glencore Keeps Its Powder Dry, But Hints at Bigger Returns – by Thomas Biesheuvel (Bloomberg News – August 8, 2018)

https://www.bloomberg.com/

Glencore Plc investors looking for bigger shareholder returns after the commodities giant’s record first-half profit may yet get their way.

While the company’s failure to increase its dividend or share buyback leaves the door open for more acquisitions, it emphasized that the focus will remain on cutting debt and returning money to shareholders. As far as potential deals go, Chief Executive Officer Ivan Glasenberg said there’s little out there.

“There nothing that looks that exciting. We don’t see anything great right now,” Glasenberg said on a call with investors. “But the thing we could do is return cash to shareholders.”

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Glencore looks to buybacks, not dealmaking – by Barbara Lewis (Reuters U.S. – August 8, 2018)

https://www.reuters.com/

LONDON (Reuters) – Glencore (GLEN.L) said it would favour share buybacks over deal-making after it reported a 23 percent rise in first-half core earnings on Wednesday, just below analyst forecasts.

The miner and commodities trader said its earnings for January-June were a record – building on 2017 full-year results it said were the best yet – but it also said higher costs and lower prices for cobalt and other byproducts ate into profits.

CEO Ivan Glasenberg said market conditions were likely to remain volatile. Many mining stocks have pared gains this year as metals markets weakened in response to trade tensions and uncertainty about Chinese demand.

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Glencore Sees Big Jump in Cobalt Supply From Congo Mines – by Thomas Biesheuvel (Bloomberg News – July 31, 2018)

https://www.bloomberg.com/

Glencore Plc increased cobalt production by almost a third after restarting output at its Katanga unit in the Democratic Republic of Congo.

The Swiss commodity giant is seeking to double its production of cobalt in the next two years, tightening its grip on the market for the key battery material in electric vehicles. First-half cobalt output jumped 31 percent to 16,700 tons, the company said in a statement on Tuesday.

While Glencore is cashing in on higher cobalt and copper demand, it also must confront serious challenges this year. The U.S. Department of Justice has launched a corruption probe into operations in Congo, Nigeria and Venezuela, and it’s facing higher taxes and tougher regulation in Congo.

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Glencore shares under cloud after U.S demands Congo documents in probe – by Zandi Shabalala (Reuters U.S. – July 12, 2018)

https://www.reuters.com/

LONDON (Reuters) – A U.S. demand for documents related to Glencore’s (GLEN.L) assets in Democratic Republic of Congo (DRC) as part of a corruption probe has rattled investors and is likely to weigh on the miner’s performance until there is more clarity on the case.

Glencore said it had received a subpoena from the U.S. Department of Justice dated July 2 requesting documents for its Congo business over compliance with the U.S. Foreign Corrupt Practices Act and rules against money laundering.

The Switzerland-based company, which said documents for Venezuela and Nigeria were also requested, provided few details, although it said it would cooperate with the authorities.

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How Glencore’s risky dealings in the Democratic Republic of the Congo may backfire – by Eric Reguly (Globe and Mail – July 6, 2018)

https://www.theglobeandmail.com/

Glencore took a balanced approach on its way to becoming the world’s biggest commodities trader and one of the top mining houses. It dealt with the sinners as well as the saints.

Sinners are everywhere in the mining industry, of course, and are all but unavoidable if you want to get deals done in regulatory-lite zones, notably Africa, which is blessed with endless resources – cobalt, copper, diamonds, oil – waiting to be tapped.

Glencore took big risks in Africa, one of which appears to have been its association with Dan Gertler, 44, the Israeli billionaire and commodities tycoon who has worked the mining game in Democratic Republic of the Congo (DRC) for about 20 years, to great success.

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Glencore Bets on South Africa as Ramaphosa Promises Revival – by Thomas Wilson and Paul Burkhardt (Bloomberg News – June 26, 2018)

https://www.bloomberg.com/

Glencore Plc has set its ambitions on expanding in South Africa, the homeland of its chief Ivan Glasenberg.

As the company’s former business partner and new President Cyril Ramaphosa promises an economic recovery, Glencore is reaping profits from coal and chrome assets as prices rise. The company announced in October a $1 billion deal to buy Chevron Corp.’s oil refining and fuel service stations in South Africa and considered a bid for the Optimum coal mine.

The oil bid “was a pretty strong vote of confidence in the South African environment,” said Martin Kingston, the chief executive officer of N.M. Rothschild & Sons Ltd. in South Africa, which is advising Chevron on the sale. “Glencore understands the environment very well. They are effective behind the scenes and they have their finger on the pulse.”

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