Glencore – Page 33 – Republic of Mining

Nickel crisis rocks French islands in Pacific – by Claudine Wery (AFP/Yahoo.com – October 4, 2015)

October 5, 2015

https://en-maktoob.news.yahoo.com/

Plunging nickel prices and the market woes of world mining giants have shaken the French territory of New Caledonia, a tropical archipelago in the Pacific that is hostage to the metal’s fortunes.

Though best known for its stunning lagoon, pristine beaches and diverse wildlife, New Caledonia’s economy actually relies heavily on nickel, discovered here in the 19th century.

The price of nickel — essential to the manufacture of stainless steel — has plunged 35 percent so far this year to a six-and-a-half year low of less than $10,000 (9,000 euros) a tonne.

A slowdown in economic growth in China, the world’s biggest consumer of nickel, and stockpiles of the metal amounting to more than 450,000 tonnes, have depressed the market.

“We were already in a deteriorating situation when the crisis hit because every sector was in a slowdown. I think we are not far from zero economic growth,” Catherine Wehbe, director of the employers’ federation Medef in New Caledonia, told AFP.

Glencore Isn’t Out of the Woods Yet – by Stanley Reed (New York Times – October 1, 2015)

October 2, 2015

http://www.nytimes.com/

LONDON — Shares of Glencore, the giant Swiss-based mining and trading company, may have recovered from a panic sell-off this week, but few analysts consider the company out of danger.

Glencore still has a heavy debt load, and investors remained worried about global economic trends and some management missteps. And the slowing Chinese economy is hurting demand for many of the commodities, like copper, that the company not only mines but also heavily trades.

Those factors have sent the stock reeling in trading in London this summer, from 289 pence in early June to a 52-week low of 68.52 pence on Monday.

“There is clearly a very strong degree of fear in the market more broadly associated with China,” said Paul Gait, a mining analyst at Bernstein Research in London. Until recently, though, the company’s management, led by Ivan Glasenberg, seemed reluctant to acknowledge the severity of the situation.

Glencore’s Wild Ride Has Investors Asking: Can It Happen Again? – by Matthew Campbell, Dinesh Nair and Jesse Riseborough (Bloomberg News – October 2, 2015)

October 2, 2015

http://www.bloomberg.com/

From London to New York to Hong Kong, the frantic question kept coming: could this be another Lehman?

But nowhere did it cause more alarm than inside Glencore Plc — the Swiss commodities giant that had suddenly found itself at the epicenter of a global panic on Monday.

What began that morning in London, with a sudden plunge in Glencore’s share price, cascaded across oceans and time zones and left the company’s billionaire chief executive, Ivan Glasenberg, scrambling to calm anxious shareholders, creditors and trading partners.

Days later, even as Glencore regained most of the $6 billion of shareholder wealth erased in a few hours, many investors wondered if Glasenberg can hold the markets at bay.

Few market players, including people close to Glencore, are able to pinpoint why a blue-chip member of the FTSE-100 Index — even one that had been under pressure from sliding commodities prices — lost almost a third of its value in a blink. And that, investors worry, suggests this could all happen again.

Glencore Slides as Recovery Fades After Three-Day Roller Coaster – by Thomas Biesheuvel and Jesse Riseborough (Bloomberg News – October 1,2015)

October 1, 2015

http://www.bloomberg.com/

Glencore Plc’s rebound ran out of puff after a two and a half day ascent that briefly recouped the $6 billion in market value it lost Monday.

The shares slid 3.1 percent to 88.72 pence by 2 p.m. in London after earlier gaining as much as 8.2 percent. Trading was halted for five minutes because of increased volatility.

Investors in the stock could probably do with the breather. Glencore has endured a roller-coaster week with unprecedented volatility for a company that went public in 2011 at 530 pence a share.

The mining and trading firm sank 29 percent on Monday to 68.62 pence on concern over its debt load and ability to withstand sinking commodity prices. It spent most of the rest of the week recovering those losses as investors spied a bargain.

Glencore sought to reassure investors on Tuesday, saying it had “absolutely no solvency issues” and its funding was secure. It also aimed to raise more than $1 billion selling future gold and silver output, according to two people familiar with the situation.

Glencore tells investors debt is being cut, trading robust – by DMITRY ZHDANNIKOV, SARAH MCFARLANE AND OLIVIA KUMWENDA-MTAMBO (Reuters U.S. – October 1, 2015)

October 1, 2015

http://www.reuters.com/

LONDON – Glencore has told investors it is on track to cut debt and has shown new data about its secretive trading unit in a fresh attempt to dispel market worries over its finances which have knocked 70 percent off its share price this year.

Its stock gained as much as 6 percent on Thursday after credit analysts from Barclays said a meeting they had organized with members of Glencore’s management on Wednesday, including the co-head of corporate finance Carlos Perezagua and the head of strategy Paul Smith, managed to address many concerns of investors and bondholders.

But it then tumbled back into negative territory, extending the week’s losses after suffering a 30 percent plunge on Monday. At 1238 GMT it traded down 3.76 percent on the day.

“It was an encouraging meeting (on Wednesday) as we believe it helped to clear up many misconceptions and confusion we believe is currently in the market around commodity trading,” credit analysts from Barclays said in a note on Thursday.

Glencore’s Glasenberg, once the hunter, now the hunted – by Clyde Russell (Reuters U.S. – September 30, 2015)

September 30, 2015

http://www.reuters.com/

LAUNCESTON, AUSTRALIA – It must be tempting for Rio Tinto Chief Executive Sam Walsh to contemplate whether he should buy Glencore, almost a year after fending off an unwelcome approach from his now beleaguered rival.

It’s safe to say the almost 30 percent plunge in Glencore’s shares to a record low on Monday has laid to rest any hope that the mining and trading company had of pulling off a merger deal with Rio Tinto, which is vying with Brazil’s Vale for the title of the world’s largest iron ore producer.

When Glencore boss Ivan Glasenberg mooted a deal with Rio Tinto in July last year, the shares were trading around 344 pence ($5.19), while those of Rio Tinto were around 3,244 pence.

By Monday, Glencore’s stock was down 80 percent to 68.62 pence, while Rio Tinto’s was at 2,111 pence, a drop of about 35 percent.

These numbers alone make any new bid by Glencore fanciful, but they do raise the possibility that Glencore itself is vulnerable.

Glencore seen reluctant to step up asset sales to include top mines – by Eric Onstad and Olivia Kumwenda-Mtambo (Reuters U.S. – September 29, 2015)

September 30, 2015

http://www.reuters.com/

LONDON/JOHANNESBURG, Sept 29 (Reuters) – Debt-laden Glencore may unload all its agricultural assets instead of just a stake, analysts said, but the commodity group is unlikely to expand its divestment programme to include top mines.

Selling assets is one prong of a wider strategy by the Swiss-based trader and miner to cut about a third of its $30 billion debt and to regain the trust of investors after its shares tumbled by about three quarters this year to record lows amid weak global commodity prices.

On Tuesday, Glencore shares bounced and the group said it was “operationally and financially robust”.

Earlier this month, Glencore outlined a plan to reap $2 billion for its debt reduction plan by selling a minority stake in its agricultural business and also the rights to precious metals extracted from its copper and zinc mines, among other possible asset sales.

On Monday, Glencore provided a taste of what might come with the $8 million sale of a Brazilian nickel project.

Glencore Copper Mines Seen Top of China’s Asset Shopping List – by David Stringer (Bloomberg News – September 30, 2015)

September 30, 2015

http://www.bloomberg.com/

As Glencore Plc looks to reduce its debt load by selling assets, analysts say Chinese companies would be most interested in the Swiss trader’s copper mines.

With China’s economic slowdown roiling commodity markets, Glencore has announced measures to shore up its balance sheet, including issuing new shares, scrapping dividends and selling assets. While it hasn’t flagged its copper operations alongside options including the sale of stakes in agriculture assets and precious metals streaming deals, the China Mining Association, Argonaut Securities Asia Ltd. and Clarksons Platou Securities say the Chinese would be willing buyers.

China’s commodities companies are seizing on the turmoil in markets to fund or buy suppliers or assets. Iron-ore giant Vale SA signed four deals with Chinese counterparts in May including a credit agreement worth as much as $4 billion, while MMG Ltd., the overseas unit of China’s biggest state-owned metals trader, led a group that bought the Las Bambas copper project in Peru from Glencore last year for about $6 billion.

“If Glencore wanted to have some asset sales then they could definitely speak to some of these Chinese companies,” Helen Lau, a mining analyst at Argonaut Securities, said by phone from Hong Kong. Potential buyers are seeking assets with high grade, good logistics and low political risks, Lau said. “Of course the price is very, very important.”

World’s best coming to Sudbury for mining games – by Keith Dempsey (Sudbury Star – September 29, 2015)

September 29, 2015

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

The Nickel City will host the 2016 International Mines Rescue Competition. Hosted by Workplace Safety North and Ontario Mine Rescue, the event will bring mine rescue teams from around the world for the competition, which will be held from Aug. 19-Aug. 26.

Vale, Glencore, KGHM, Goldcorp and Drager are sponsoring the event.

“Quite frankly, the competition we’ll see is second to none,” Alex Gryska, Canada International Mines Rescue Competition co-ordinator, said. “If you take a look at this event, you’re going to have volunteers and full-timers (taking part), so you’ll have individuals that are in this event who are full-time mine rescue responders, so the level of capability will be extremely high.”

Hosting the International Mines Rescue Competition in Canada has been something Gryska has been chasing for years.

“I’ve been connected with the International Mines Rescue body since 2001, and my colleagues oversee mine rescue in their respective organizations, so I’ve been connected with them,” Gryska said.

Glencore Rebounds as Analysts Say $50 Billion Plunge Is Overdone – by Jesse Riseborough (Bloomberg News – September 29, 2015)

September 29, 2015

http://www.bloomberg.com/

Glencore Plc, the commodities group that’s lost almost $50 billion in market value this year, rallied in London as analysts said the rout probably didn’t reflect its true value and Citigroup Inc. wrote the management should consider taking the company private.

The Swiss company rose as much as 11 percent on Tuesday, clawing back some of the 29 percent slump yesterday driven by concern the company has too much debt to withstand the declines in commodities. Even so, Glencore’s credit-default swaps rose again today, signaling that the company has a 56 percent chance of default in five years, according to data from S&P Capital IQ’s CMA.

“The pummeling of Glencore yesterday was irrational,” Robin Bhar, an analyst at Societe Generale SA, said by phone from London. “Unless you think commodity prices are going close to zero, then this was overdone.”

Glencore has been embroiled in a China-led slowdown that’s hit prices for commodities from oil to copper to coal, heightening investor concern about its debt and sending the shares down 77 percent this year.

With Glencore, Commodity Rout Beginning to Look Like a Crisis – by Bradley Olson (Bloomberg News – September 28, 2015)

September 28, 2015

http://www.bloomberg.com/news

The 15-month commodities free-fall is starting to resemble a full-blown crisis.

Investors are reacting to diminished demand from China and an end to the cheap-money era provided by the Federal Reserve. A Bloomberg index of commodity futures has fallen 50 percent since a 2011 high, and eight of the 10 worst performers in the Standard & Poor’s 500 Index this year are commodities-related businesses.

Now it all seems to be coming apart at once. Alcoa Inc., the biggest U.S. aluminum producer, said it would break itself into two companies amid a glut stemming from booming production. Royal Dutch Shell Plc announced it would abandon its drilling campaign in U.S. Arctic waters after spending $7 billion.

And the carnage culminated Monday with Glencore Plc, the commodities powerhouse that came to symbolize the era with its initial public offering in 2011 and bold acquisition of a rival in 2013, falling by as much as 31 percent in London trading.

UPDATE 4-Copper, Glencore send Zambian kwacha into freefall – by Chris Mfula and Karin Strohecker (Reuters U.S. – September 28, 2015)

September 28, 2015

http://www.reuters.com/

LUSAKA/LONDON, Sept 28 (Reuters) – Zambia’s currency went into freefall on Monday as prices for its copper exports hit a one-month low, feeding fears that mining giant Glencore might further rein in its extensive operations there.

The kwacha was down more than 17 percent against the dollar at one point, its biggest one-day fall on record, further hampered by a rating downgrade from credit agency Moody’s that the government criticised as unsolicited.

“We have a double-whammy, meaning copper prices continue to soften, and production targets are really at risk because of the Glencore news,” said Kevin Daly, portfolio manager at Aberdeen Asset Management in London.

Glencore’s Mopani Copper Mines is the second largest employer in Zambia after the government, but fears over the mining and trading company’s ability to withstand a prolonged fall in metals prices sent its shares tumbling 25 percent on Monday.

Glencore Needs a Little Privacy – by Liam Denning (Bloomberg Business – September 28, 2015)

September 28, 2015

http://www.bloomberg.com/

Could Mick Davis save Glencore?

That might seem like an odd (or churlish) question to ask: After all, it was Glencore’s decision to buy Xstrata, the mining behemoth that Davis built, which saddled the commodity trading firm with a lot of the debt now weighing on its shares.

The latter slumped 27 percent on Monday to about 70 pence each after Investec Securities released a report speculating that depressed commodity prices could wipe out Glencore’s equity value. That report came just days after one from Goldman Sachs throwing doubt on Glencore’s investment-grade credit rating — a big deal for a trading firm. The shares sank below 100 pence for the first time since 2011’s initial public offering, when they priced at 530 pence apiece.

That 87 percent drop since the IPO makes Glencore the worst-performing major mining stock aside from Vale — which at least has the excuse of being listed in Brazil. Apart from Glencore’s balance sheet having made its stock a pinata for analysts, the crisis raises a more fundamental question: Should Glencore exist in its current form?

NEWS RELEASE: Horizonte consolidates Araguaia nickel project through acquisition of Glencore project

September 28, 2015

/PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL./

LONDON, Sept. 28, 2015 /CNW/ – Horizonte Minerals Plc, (AIM: HZM, TSX: HZM) (‘Horizonte’, ‘HZM’ or ‘the Company’) the nickel development company focused in Brazil, is pleased to announce that it has reached agreement to indirectly acquire through wholly owned subsidiaries in Brazil the advanced high-grade Glencore Araguaia nickel project (‘GAP’) in north central Brazil (the ‘Proposed Transaction’). GAP combined with Horizonte’s 100% owned high-grade Araguaia nickel project (‘Araguaia’ or ‘Araguaia Project’) creates one of the world’s largest nickel saprolite projects in terms of size and grade, in a premier mining jurisdiction that has a defined path to feasibility.

Highlights

The combination of GAP and Horizonte’s Araguaia Project will create one of the largest saprolite nickel projects in the world (the “Enlarged Project”).
Additional resources with potential to provide ore grading 2% nickel for the first 10 years of mine life.
Higher nickel grades are expected to improve project economics delivering a shorter capital repayment period and a lower break even nickel price.
Upfront consideration on closing of US$2M to be satisfied through issue of HZM shares.
Total acquisition cost US$8M.
Placing of new shares to raise £1.55M through existing cornerstone shareholders.

Glencore slumps 30% as debt fears grow – by Lionel Laurent and Sudip Kar-Gupta (Reuters/Globe and Mail – September 28, 2015)

September 28, 2015

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

LONDON — Reuters – Glencore shares tumbled more than 30 per cent to an all-time low on Monday on fears that the mining and trading company was not doing enough to rein in its debt to withstand a prolonged fall in global metals prices.

About 3.5 billion pounds ($5.33-billion) in market value was wiped off the firm, which is in the middle of a drive to sell assets and raise cash to help cut its $30-billion debt pile and protect its credit rating after a crunch in prices of its main products, copper and coal.

Swiss-based and London-listed Glencore earlier this month raised $2.5-billion through a share placement, part of a wider plan to cut its net debt by a third by the end of 2016.

Glencore’s top individual shareholders, according to Thomson Reuters Eikon data, include CEO Ivan Glasenberg, with an 8.4 per cent stake, and Qatar Holding, with 8.2 per cent. Qatar is also a top shareholder of German auto maker Volkswagen , another beaten-up blue-chip.

Monday’s fall spread to the broader UK mining sector, which has also felt the pain from an emerging-markets slowdown and a crash in commodities prices. The FTSE 350 mining index sank to its lowest level since Dec. 2008.