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Glencore

UPDATE 2-Glencore raises trading guidance, sees electric vehicles boosting demand – by Barbara Lewis (Reuters U.S. – August 10, 2017)

https://www.reuters.com/

LONDON, Aug 10 (Reuters) – Mining group Glencore raised earnings guidance for its trading business, citing higher commodity prices, and said on Thursday increased take-up of electric vehicles and demand for energy storage would boost demand for its products.

Following the commodities downturn of 2015-16, big miners have repaired their balance sheets to help position themselves for growth. Glencore has cut debt and also has a mix of assets that could help it benefit from an upsurge in electric cars.

The company raised full-year guidance for adjusted earnings before interest and tax (EBIT) in its trading or marketing business by $100 million to a range of between $2.4 billion and $2.7 billion.

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Glencore turns bigger copper, zinc price bull: Nickel not so much – by Frik Els (Mining.com – August 10, 2017)

http://www.mining.com/

Miner and commodities trader Glencore (LON:GLEN) raised its revenue and profit outlook for the year on Thursday with the Swiss company citing the fast-growing electric vehicle market as a key driver.

“Most automotive players are now accelerating investment in/adoption of electric vehicle technologies, reflecting, in part, increasingly aggressive Government mandates around emission targets.

Growth in electric vehicle/energy storage systems requires changes in material flows, including the installation, rebuild and replacement of supporting infrastructure. Based on current and emerging technologies, these changes should benefit enabling commodities such as copper, cobalt and nickel,” Glencore said in a statement accompanying its half-year results.

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Merafe’s profit surges despite drop in sales – by Allan Seccombe (Business Day – August 8, 2017)

Merafe Resources, the junior partner in a chrome joint venture with Glencore, reported a hefty inventory build-up as production exceeded sales, while global demand for the stainless steel ingredient slowed and the market stayed under pressure.

The joint venture is one of the world’s leading sources of ferrochrome and chrome ore, and it operates in SA. Merafe said revenue attributable to the company increased 7% to R2.58bn for the six months to end June compared with that of the same period a year earlier. Profit increased to R486m from R57m, allowing the company to declare a 3c per share dividend. Net debt fell by half to R208m.

Stronger prices in the first half of the year offset a 28% drop in sales to 157,000 tonnes for Merafe’s account, while a stronger rand against the dollar eroded the revenue line.

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Focus on Economy Before Climate Deal, Glencore Urges Australia – by Perry Williams (Bloomberg News – August 2, 2017)

https://www.bloomberg.com/

Australia may need to consider delaying its goals to combat global climate change in order to prioritize energy security and economic prosperity, according to a senior executive at Glencore Plc.

The country’s emerging energy crisis, in conjunction with government-imposed clean-energy targets, has undermined investor confidence and may force businesses to shut or move offshore, the commodity giant’s global coal head, Peter Freyberg, said in a speech Wednesday in Sydney.

“If that means Australia needs to consider a possible delay in meeting its emission reduction targets under the Paris Agreement in order to prioritize energy security and economic prosperity, then its worthy of further discussion,” he said, adding that Swiss-based Glencore has invested $20 billion in its Australian assets and last year contributed more than $12 billion to the economy.

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Glencore snaps up 49pc of Hunter Valley Operations in $US1bn deal – by Matt Chambers (The Australian – July 27, 2017)

http://www.theaustralian.com.au/

UPDATE: Glencore has confirmed it had struck a $US1.139 billion deal to buy 49 per cent of the Hunter Valley Operations coal mines from Yancoal Australia and Mitsubishi.

The deal, which is conditional on approvals and the completion of Yancoal’s acquisition of Rio Tinto’s operating stake in HVO as part of a $US2.69bn deal struck last month to buy all of Rio’s Australian thermal coal, is expected to be completed within six months.

Under the deal, revealed by The Australian this afternoon, Glencore has also agreed to subscribe for $US300 million of Yancoal shares in an equity raising to fund Yancoal’s Rio purchase.

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[Ontario] Research to keep miners cool at extreme depths – by Len Gillis (Timmins Daily Press – July 25, 2017)

http://www.timminspress.com/

New research is underway to help miners stay cooler while working at extreme depths underground. Such research could eventually benefit workers at the Kidd Mine in Timmins, which is the deepest base metal mine in the world.

Research scientist Dr. Stephen Cheung of Brock University said the ultimate goal is to find ways to make miners feel cooler and more comfortable and therefore be able to contribute more to more production. “As you know the deeper you go, the hotter the mines are and the greater the energy costs to ventilate those mines so that the miners can actually be working underground,” said Cheung.

“The idea here really is rather than cooling the entire chamber, it is most likely much more cost effective and efficient to be cooling the individual miners. So that’s kind of the genesis or the idea for the whole project,” he added.

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Zinc Rally Set to Last as Producer Sees Best Price in Decade – by Swansy Afonso (Bloomberg News – July 20, 2017)

https://www.bloomberg.com/

The rally in zinc prices has the potential to jump this year to levels not seen in a decade as demand continues to outstrip supply amid mine output disruptions, according to Hindustan Zinc Ltd., Asia’s biggest producer by market value.

Prices may rise to about $3,000 a metric ton on the London Metal Exchange in the next couple of quarters, Sunil Duggal, chief executive officer of the Vedanta Ltd. unit, said in a phone interview from Udaipur in Rajasthan. The last time prices hit that level was in 2007, according to data compiled by Bloomberg.

Zinc, used to galvanize steel, has spearheaded an advance in base metals, gaining about 23 percent in the past year, as production cuts by Glencore Plc and other suppliers helped spur shortages. Higher prices and an increase in output saw Hindustan Zinc on Thursday report an 81 percent increase in net income to 18.8 billion rupees ($292 million) in the three months to June.

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Glencore plans spin-off of mining royalties business – by Neil Hume (Financial Times – July 17, 2017)

https://www.ft.com/

Glencore is preparing to spin-off its portfolio of mining royalties into a new company later this year in an attempt to attract outside investors with an eye on an eventual stock market listing, according to people with knowledge of the discussions.

Glencore plans to seed the new company with royalty agreements worth in excess of $300m, while looking to attract a strategic partner to fund further deals. The mining and trading house wants to provide more financing to junior miners in return for a slice of their revenue and exclusive marketing deals.

The plan is the latest sign that billionaire Ivan Glasenberg, chief executive of the Swiss-based company, is pursuing growth after two years in which the commodity downturn forced it to focus on paying down debts and repairing its balance sheet.

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Mining giant in radical program to fight suicide (Makay Daily Mercury – July 17, 2017)

https://www.dailymercury.com.au/

ANGLO-Swiss mining giant Glencore is establishing an Australian beachhead in the fight against suicide with a radical program already under way in the historic mining town of Clermont, southwest of Mackay.

Glencore, along with the NSW Coal Services Health and Safety Trust, is a driving force behind Mates in Mining, which encourages workers to ask each other a confronting question still regarded as taboo: “Are you contemplating suicide?” The program fuses together workers, unions and employers in tackling an issue that’s at crisis proportions among men working in construction and mining.

Glencore is backing the charity, which is soon to be rolled out across the nation, while other mining companies such as BHP and Rio Tinto have in-house programs to deal with the issue.

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Exclusive – Glencore makes large cobalt deal, securing EV battery supplies for VW – by Pratima Desai (Reuters U.K. -July 6, 2017)

http://uk.reuters.com/

LONDON – Mining giant Glencore (GLEN.L) has signed a major deal to sell up to 20,000 tonnes of cobalt products to a Chinese firm, a move that in turn helps Volkswagen (VOWG_p.DE) secure car batteries for its shift to electric vehicles, four sources said.

The four-year agreement between Glencore and Chinese battery maker Contemporary Amperex Technology Co Ltd (CATL), struck last October, comes as global carmakers race to lock in battery supplies and move away from traditional combustion engines.The trend was reinforced this week by Chinese-owned, Sweden-based Volvo, which said all of its models launched after 2019 will be electric or hybrid.

Cobalt is a key ingredient in the lithium-ion batteries used to power electric vehicles (EVs), with sales expected to grow fast in coming years as governments around the world clamp down on polluting fossil fuels such as diesel and gasoline.

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Rio Tinto shareholders okay $2.69 billion coal assets sale to China-backed Yancoal – by James Regan (Reuters U.S. – June 29, 2017)

https://www.reuters.com/

SYDNEY – Rio Tinto shareholders approved the sale of a suite of Australian coal assets to China-backed Yancoal Australia for $2.69 billion, ending a bidding war with commodities trader Glencore.

The sale was approved by 97 percent of shareholders of Rio Tinto’s UK and Australian-listed shares, Rio Tinto said on Thursday in a statement to the Australian stock exchange.

Rio Tinto Chairman Jan du Plessis said funds from the sale had yet to be allocated within the company amid some calls by shareholders to use the money to boost dividends or buy back shares.

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How Yancoal and Glencore Can Bury the Hatchet – by David Fickling (Bloomberg News – June 27, 2017)

https://www.bloomberg.com/

The world’s biggest coal consumer and the largest commodity trader are fighting over a rich seam of the black stuff. They’d be better off working together.

Shareholders of Rio Tinto Group’s U.K. listing were voting Tuesday on whether to accept a $2.69 billion offer to buy Coal & Allied Industries Ltd. from Yancoal Australia Ltd., which is ultimately controlled by the Chinese government.

Rio Tinto’s management has declared the proposal superior to a bid from Glencore Plc, which has adjacent mines in Australia’s Hunter Valley, north of Sydney, and has coveted Rio Tinto’s deposit for the best part of a decade.

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COLUMN-Fight over Rio’s mines means coal isn’t dead; Adani woes show it’s dying – by Clyde Russell (Reuters U.S. – June 26, 2017)

https://www.reuters.com/

Here’s a question for the anti-coal lobby. If coal is dying, how come there is an increasingly heated bidding war going on for Rio Tinto’s coal mines in Australia? Here’s another question, this time for the pro-coal lobby. If coal still has a viable long-term future as an energy source, how come the world’s biggest planned new mine is now hostage to whether the Australian government decides to loan it money?

Reconciling these two questions may seem like a challenge but both the battle for Rio Tinto’s existing mines and the struggles of India’s Adani to build its Carmichael project neatly show where coal currently finds itself.

Rio’s mines in the Hunter Valley north of Sydney are attractive to both Glencore and China’s Yancoal because they are likely to be profitable for the remaining life of the pits, which is expected to be around 20 years.

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Bidding war intensifies for Rio Tinto’s Hunter Valley coal mines – by David Chau (Australian Broadcasting Corporation – June 26, 2017)

http://www.abc.net.au/

Rio Tinto is currently in a dilemma on who it should sell its Hunter Valley mines to – the Swiss or the Chinese. Late on Friday, Swiss-based company Glencore upped its bid to more than $3.5 billion (US$2.685 billion) for the purchase of Rio’s subsidiary, Coal & Allied Industries Limited.

The assets on the block are Rio’s Hunter Valley operations – the Warkworth/Mount Thorley thermal and semi-soft coking coal mines and a major stake in the Port Waratah coal loading facility in Newcastle.

Glencore said its latest offer is around $297 million ($US225 million) greater than Yancoal’s proposal. “We believe the Glencore offer satisfies the criteria for a ‘superior proposal’: it delivers substantially greater value to Rio Tinto shareholders and low deal completion risk,” Glencore said in a statement.

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Rio Tinto recommends Yancoal coal offer over Glencore – by James Regan and Barbara Lewis (Reuters U.S. – June 20 2017)

https://www.reuters.com/

SYDNEY/LONDON – Rio Tinto (RIO.L) (RIO.AX) selected Yancoal (YAL.AX) on Tuesday to buy its Coal & Allied division in Australia for $2.45 billion, surprising commodities trading giant Glencore (GLEN.L) which had put in a higher bid.

Earlier this month, Glencore offered $2.55 billion cash for Rio’s coal mines in the Hunter Valley region of New South Wales, beating a previous offer from Yancoal, which is based in Australia and owned by China’s Yanzhou Coal Mining Company.

Glencore has long sought Rio’s high-quality thermal coal assets in the Hunter Valley. Despite environmental concerns about the carbon-intensive fossil fuel, Glencore expects continued demand, especially in Asia, as coal can still be the cheapest form of baseload power.

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