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Sudbury reflects on 10 years since foreign takeovers of Inco and Falconbridge (CBC News Sudbury – October 23, 2016)

http://www.cbc.ca/news/canada/sudbury/

Many in Sudbury feel a merger between the two local mining companies would have been best

It has been 10 years since the foreign takeovers of Sudbury’s two homegrown mining companies. And the debate continues over whether or not this has tarnished the Nickel Capital over the last decade.

Vale — then known as CVRD — officially took over Inco on Oct. 24, 2006, three months after Falconbridge was bought by Swiss-based Xstrata.John Fera was president of Steelworkers 6500 when Inco became Vale in 2006.

He says the Brazilian company promised to make things better — but that hasn’t happened.
“It doesn’t seem to be the family atmosphere it used to be. I mean we had our fights with Inco and Falconbridge, but when the fight was over, the fight was over,” he says. “I don’t see our workplaces being better. I don’t see our workplaces being safe than before these people came.”

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[Sudbury Basin] Charges in miner’s death – by Carol Mulligan (Sudbury Star – October 20, 2016)

http://www.thesudburystar.com/

Tears will be shed today by hard-rock miners at Nickel Rim South Mine, by the union that represents them, and by friends and family as they mark the one-year anniversary of the workplace death of a man who was beloved.

Richard Pigeau, 54, was killed Oct. 20, 2015, when he was struck by a piece of machinery while working in the mine owned by Sudbury Integrated Nickel Operations (Glencore).

Just days before this sombre anniversary, the Ministry of Labour laid seven charges under the Occupational Health and Safety Act against Glencore Canada Corp. and two against a supervisor after a one-year investigation into Pigeau’s death.

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Japan’s Top Producer Says Zinc Could Surge to 5-Year High – by Masumi Suga and Ichiro Suzuki (Bloomberg News – October 17, 2016)

http://www.bloomberg.com/

Zinc, this year’s best performing metal, has the potential to extend gains to the highest level since 2011 because of a shortfall in ore production, assuming that Glencore Plc doesn’t restart idled mines, according to Japan’s biggest producer.

Prices could advance to $2,500 a metric ton by March because of “super tight” ore supply after companies cut output, Osamu Saito, general manager of Mitsui Mining & Smelting Co.’s metals sales group, said in an interview in Tokyo. “Even if Glencore ends production cuts, supply will continue to trail demand, though the feeling of shortage will ease somewhat.”

The company joins Goldman Sachs Group Inc., Deutsche Bank AG and Citigroup Inc. in highlighting the bullish outlook. Goldman Sachs predicts that zinc will reach $2,500 in three months, while Citigroup says it will average $2,445 in 2017.

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A decade ago, Vale bought Inco: What’s the company’s legacy in Sudbury? – by Jonathan Migneault (Sudbury Northern Life – October 6, 2016)

https://www.sudbury.com/

Brazilian miner purchased Inco for $19.4 billion on Oct. 6, 2006

Ten years ago today, Canadians became much more familiar with a Brazilian mining company called Vale. On Oct. 6, 2006, Vale purchased homegrown miner Inco in a $19.4-billion bid.

The New York Times said at the time the sale “further undermines Canada’s status as a force in the mining industry.” But with the benefit of hindsight, others have said Vale’s purchase of Inco had to happen.

Jean-Charles Cachon, chair of Laurentian University’s department of management, has argued both Inco and Falconbridge did not have the financial clout needed to expand their operations and meet growing global demand for nickel and copper.

In 2006, said Cachon, both companies forecasted demand for nickel and copper would increase by about 50 per cent over the next seven years, due to growing demand in emerging markets like China and India.

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BNN’s Andrew Bell Interviews Franco-Nevada’s Pierre Lassonde (Business Network News – September 30, 2016)

http://www.bnn.ca/

Franco-Nevada chairman calls Inco takeover ‘an unmitigated disaster,’ 10 years on

This week, we’ve been marking the 10-year anniversary of Inco agreeing to a takeover by Brazil’s Vale. Along with the sale of Falconbridge to Xstrata of Switzerland shortly before, the deal saw the biggest mines in Ontario’s rich Sudbury basin pass into foreign hands.

One of the elder statesmen of Canadian mining told BNN that allowing the sale of the two nickel producers to non-Canadian buyers a decade ago was “a huge political mistake, to let two giant Canadian companies go.”

Pierre Lassonde, chairman of royalty and streaming player Franco-Nevada (FNV.TO 1.56%), said “Australia would have never done that. They would never have let BHP (BHP.N), for example, go. With that, the head office left and the jobs and the research…. I think it has been an unmitigated disaster.”

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Renewables not cost competitive until mid-century: Glencore – by Nina Chestney (Reuters U.S. – September 27, 2016)

http://www.reuters.com/

LONDON – Renewable energy will not be cost competitive with fossil fuels until 2050, Glencore said on Tuesday, much later than energy organizations forecast and supporting the mining and trading giant’s case for continued investment in coal.

Glencore has said coal is still an investment opportunity, forecasting global demand will grow by 7 percent by 2030, driven by emerging economies and industrial demand, and halting spending would halve seaborne supplies in 15 years’ time.

Glencore Chairman Tony Hayward told a conference in London on Tuesday that, like oil companies, the group would get a return on its investment. “The investment we put in the ground today will come out in 10 years. The same applies to the world’s oil and gas companies – their investments will come out in 20 years,” Hayward said.

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The hollowing out of Canadian mining: Vale’s takeover of Inco, 10 years on – by Andrew Bell (Business Network News – September 23, 2016)

 

http://www.bnn.ca/

Ten years ago this Saturday, a global mining gem slipped out of Canadian fingers. In 2006, Canadian nickel miner Inco agreed to be bought by Brazil’s Vale in a $19-billion takeover. The announcement of the acquisition came just weeks after fellow nickel giant Falconbridge was acquired by Xstrata of Switzerland (now part of Glencore) in an $18-billion deal. The previous year, Falconbridge had combined with another Canadian mineral giant, Noranda.

The Inco sale “further undermines Canada’s status as a force in the mining industry,” the New York Times proclaimed at the time of the acquisition.

The two takeovers rankled because both Inco and Falconbridge sat atop a mineral lode in in Sudbury, Ont., which is among one of the greatest deposits on Earth. Vale itself calls the northern Ontario city “the mining capital of the world,” adding that its operations there “are among our largest on the planet, employing approximately 4,000 people.”

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Glencore Sees Nickel Price Rising on Global Supply Shortage – by Eko Listiyorini (Bloomberg News – September 21, 2016)

http://www.bloomberg.com/

Glencore Plc, the commodities trader and miner, expects nickel prices to climb through 2018 as demand outstrips supply, assuming Indonesia continues its policy of curbing ore exports and encouraging local processing.

“We believe we’ve seen the bottom, both in terms of the actual spot prices experienced earlier this year and also in terms of the annual average we will see in 2016,” said Kenny Ives, the company’s head of nickel. “We expect spot prices to be higher and we also expect the average to be higher,” he said in an interview in Jakarta on Tuesday.

Nickel prices have advanced 17 percent this year on the London Metal Exchange as global stockpiles declined. The Philippines, the world’s largest shipper of mined nickel used in stainless steel, is carrying out an environmental audit and closing mines that don’t meet international standards, curbing supply. Output of stainless steel in China, the world’s biggest producer, has also been increasing this year as new capacity fires up.

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‘We’re already doing it’: Quebec company touts wind power in Canada’s Arctic – by Sima Sahar Zerehi (CBC News North – September 20, 2016)

http://www.cbc.ca/news/canada/north/

‘Renewable energy is available today and can be installed in the Arctic,’ says Quebec’s Tugliq Energy

A company that has designed a wind turbine in Nunavik, in northern Quebec, says the same technology would work in Nunavut and other remote areas of the Arctic. ugliq Energy says its wind turbine has cut costs at Glencore’s Raglan Mine, lowered the mine’s use of diesel, and minimized its carbon footprint. Tugliq now wants to bring the same technology to mine sites in Nunavut, such as TMAC’s Hope Bay mine, and communities across the North.

“We’re already doing it — renewable energy is available today and can be installed in the Arctic,” said Laurent Abbatiello, CEO of the Quebec-based Tugliq Energy. “It is feasible technically and there’s also strong business cases in many occurrences where it’s going to be profitable.”

Raglan Mine is a large nickel mining complex in the Nunavik region of northern Quebec, approximately 100 kilometres south of Deception Bay.

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Vale Said to Sign $1 Billion Bank Funding Backed by Glencore – by Javier Blas and R.T. Watson (Bloomberg News – September 15, 2016)

http://www.bloomberg.com/

Vale SA borrowed $1 billion from a global assembly of banks, guaranteeing it with iron-ore shipments to Glencore Plc, people with knowledge said, in an arrangement that shows the cash squeeze faced by miners.

The world’s top iron-ore producer signed the so-called pre-export financing, which has a maturity of two and a half years, in June, the same people said, asking not to be named because the information is private.

Vale, which draws most of its revenue from Brazilian iron-ore mines, has suffered as the price of the steel-making commodity plunged and its debt ballooned. From a peak of $192 a metric ton in early 2011, iron ore prices fell to $38 in late 2015. Since then, prices have recovered to about $56.

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How Glencore’s Roller-Coaster Ride Tamed Its Swashbuckling CEO – by Bryan Gruley, Jesse Riseborough and Javier Blas (Bloomberg News – September 7, 2016)

http://www.bloomberg.com/

Chief Executive Ivan Glasenberg and his band of traders ran the commodities behemoth with swagger. 2015’s plunging metal prices and company stock forced them to enact a rescue plan that’s still playing out.

“Are you sure this is the right thing to do?”

Ivan Glasenberg, chief executive of commodities behemoth Glencore, asked the question again and again. His underlings and advisers, hastily summoned to their company’s Baar, Switzerland, headquarters one year ago, reassured and debated with him as he kept asking: Is this right? It was a rare moment in which Glasenberg was circumspect in front of his team.

The 59-year-old CEO has a reputation as the shrewdest, boldest leader in his industry—not just the proverbial smartest guy in the room, but in the entire world of copper, coal, oil, aluminum, and wheat. On that Sunday last year, Glasenberg led a company with about $170 billion in annual revenue, 160,000 employees, and a market value of $26 billion. With operations on six continents, Glencore supplies grains for breakfast cereal, cotton for T-shirts, power for homes, and copper for pipe and electrical wires.

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Glencore’s interest in Rio Tinto coal assets reignited – by Sarah Thompson, Anthony Macdonald and Joyce Moullakis (Financial Post – September 1, 2016)

http://www.afr.com/

Glencore is once again considering an acquisition of Rio Tinto’s $US 1 billion-plus coal assets, as revealed by Street Talk on Thursday. Deutsche Bank is understood to be in Rio’s corner but it’s unclear whether Glencore is using advisers.

Street Talk understands this time around, Glencore is seeking to buy all of Rio’s Australian coal, including the mining giant’s coking coal assets in Queensland.

The official book value at June 30, 2016, for Rio Tinto Coal Australia was $US1.15 billion. Glencore, which last ran a ruler over the thermal coal assets a year ago, has had its eye on Rio’s Hunter Valley portfolio for the best part of three years.

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Glencore’s Worst Profit Shows Miners Still Reeling From Rout – by Jesse Riseborough (August 24, 2016)

http://www.bloomberg.com/

Glencore Plc’s lowest profit in its five-year history as a public company shows that for all its success in soothing investor concerns about a debt-heavy balance sheet, it’s still a long road to recovery.

Weak raw-material prices caused profit at the commodities giant to plunge 66 percent in the first half to $300 million. The shares dropped 3.1 percent in London even as Glencore promised to cut debt even further and said it may resume paying dividends next year.

The company, the world’s biggest coal exporter, also recorded a $395 million loss after hedging future coal production prior to a price rally. The results from Glencore reflect the dire state of the mining industry — BHP Billiton Ltd. also suffered its lowest profit yet and Rio Tinto Group’s were the poorest in more than a decade.

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Glencore, Anglo Rally Loses Steam as Miners Deliver on Debt Cuts – by Jesse Riseborough (Bloomberg News – August 23, 2016)

http://www.bloomberg.com/

Rescue plans unveiled by embattled mining companies Glencore Plc and Anglo American Plc in the past year have won over investors. Yet a rally in the stocks is stalling this month.

Glencore is barely changed in August and Anglo is up less than 4 percent after they more than doubled in the year through July. For Glencore, there are now fewer catalysts for gains as the Swiss company is closer to completing a $13 billion debt reduction plan, according to Macquarie Group Ltd. analyst Alon Olsha, who downgraded the stock to neutral last week because of the rally.

The world’s biggest mining companies have sold assets, scrapped dividends, reined in spending, and in Glencore’s case sold $2.5 billion of stock, to cut debt loads that panicked investors last year as raw-materials prices collapsed. On Wednesday, Glencore investors will get an update on its progress toward a net-debt target of as low as $17 billion by the end of the year as it announces first-half profits.

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Glencore ‘Vindicated’ on Zinc Mine Cuts, Morgan Stanley Says (Bloomberg News – August 22, 2016)

http://www.bloomberg.com/

Glencore Plc’s decision to cut zinc output to fight a rout in prices last year has been vindicated as the metal has rallied in 2016, according to Morgan Stanley, which held out the possibility that the commodity trader may order restarts.

“It turns out, cutting/waiting was a good plan,” Morgan Stanley said in a note, which contained the heading “Glencore, vindicated.” The metal “may be supported/lifted, if China’s steel-production rate remains at around 800 million tons per year into 2017.

Conversely, the most likely short-term price cap for zinc is the reactivation of Glencore’s dormant mining capability,” it said. Glencore is the biggest zinc miner.

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