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Glencore Slumps to Record Low as Profit Drops 56% on Metals Rout – by Jesse Riseborough and Javier Blas (Bloomberg News – August 19, 2015)

http://www.bloomberg.com/

Glencore Plc slumped to a record in London after reporting a 56 percent drop in first-half profit on the China-led rout in commodity prices.

Glencore, the worst performer on the U.K.’s benchmark stock index this year, slid as much as 9.4 percent. The company cut its full-year earnings forecast for its trading division. It also outlined further spending reductions as billionaire Chief Executive Officer Ivan Glasenberg pares debt in an effort to maintain dividends while preserving an investment-grade credit rating.

“We’ve got a worsening situation right now,” John Meyer, a mining analyst at SP Angel Corporate Finance LLP, said in an interview with Bloomberg Television. “Glencore I think should’ve performed a little bit better through the first half. This is going to disappoint many. The metals trading didn’t do so well. China really slowed down, it totally hit a wall.”

The world’s biggest natural resources companies have seen copper and oil prices fall to six-year lows as China’s economy expands at the slowest pace in a quarter of a century. Glasenberg said in an interview that nobody can read the Chinese economy right now.

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Glencore swoops on Sirius’ nickel – by Peter Ker (Sydney Morning Herald – August 18, 2015)

http://www.smh.com.au/

Glencore’s financial troubles have not prevented the Swiss giant from swooping on the remaining offtake from Sirius Resources’ Nova mine in WA. In a deal that completes the offtake process for Sirius for the time being, Glencore will buy half of the nickel and copper concentrate produced at Nova for the first three years of the mine.

The agreement comes after BHP Billiton agreed in March to buy half of the first three years’ concentrate from Nova, and Trafigura agreed to buy copper concentrate from the mine.

Both BHP and Glencore have nickel operations within a few hundred kilometres of the Nova mine but while the concentrate bound for BHP will go into its Nickel West smelter at Kalgoorlie, Sirius said the concentrate bought by Glencore would be shipped overseas out of either Esperance or Geraldton ports.

Nova is not expected to come into production until late 2016, and the fact that 100 per cent of production for the first three years has already been sold amid a weak nickel market is a tribute to the expected high quality of the Sirius concentrate.

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Glencore sells assets as downturn bites – by James Wilson (Financial Times – August 14, 2015)

http://www.ft.com/intl/

Glencore sold a trio of mining assets for $290m, extending its retreat from unwanted projects and continuing a trend among the largest resource companies to streamline their portfolios as the commodities downturn bites.

The UK-listed miner confirmed the sale of Tampakan, a copper project in the Philippines. It also revealed deals to sell Falcondo, a nickel producer in the Dominican Republic, and Sipilou, another nickel project in Ivory Coast.

Glencore inherited the assets as part of its takeover of Xstrata, completed in 2013, but has not significantly invested in them. For a project such as Tampakan, it could cost close to $6bn to build a mine.

Ivan Glasenberg, Glencore’s chief executive, has repeatedly said he dislikes the risks of “greenfield” mining developments, preferring to seek growth by expanding existing mines or via deals.

“Tampakan is one of those giant greenfield deposits . . . that’s been on the table for a long time, but struggling to obtain development approvals in the Philippines,” said analysts at Numis.

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Glencore and BHP Fall to Lowest in Years as Miners Shunned – by Jesse Riseborough and Thomas Biesheuvel (Bloomberg News – August 12, 2015)

http://www.bloomberg.com/

Glencore Plc and BHP Billiton Ltd. shares fell to the lowest in at least four years as investors continued to shun mining companies on concern Chinese demand for commodities is waning.

The FTSE 350 Mining Index of 14 producers fell for a second day to the lowest since March 2009. BHP, the world’s biggest miner, dropped to a six-year low while Glencore slid as much as 7 percent to the lowest since it started trading in 2011.

Commodity prices are near a 13-year low and this year’s 18 percent plunge in the Bloomberg World Mining Index wiped almost $200 billion off the value of the biggest producers. China, the biggest raw-materials user, this week devalued its currency in a move that supports exports and makes imports more expensive. That further spooked investors already concerned that consumption is falling as the country’s economy expands at the slowest pace in a quarter of a century.

“This is coming at a time when the market is capitulating anyway,” Marc Elliott, an analyst at Investec Plc in London, said by phone, referring to the weakening yuan.

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Glencore’s Trading Profit at Risk From Rout in Commodities – by Jesse Riseborough and Javier Blas (Bloomberg News – August 10, 2015)

http://www.bloomberg.com/

Glencore Plc’s trading business is at risk of missing its earnings target for this year, if analyst estimates and historical precedent are any guide.

The division may report adjusted earnings before interest and tax of $1.28 billion for the first six months of the year, according to the average estimate of nine analysts surveyed by Bloomberg News. That’s less than half the company’s full-year target of $2.7 billion to $3.7 billion. For the past three years, second-half trading profit has never beat first-half.

The trading operation, which handles everything from cotton to copper to oil, is under pressure as a glut of global metal supply reduces the premiums that Glencore can charge to clients.

Agriculture traders have also struggled, with Cargill Inc. reporting its first quarterly loss since 2001 and Bunge Ltd. missing analysts’ estimates. Glencore shares hit a record low last week and have slumped 62 percent since 2011.

“While everyone has been quick to call the end of the commodities super-cycle, the more important shift for Glencore is the end of the era of super-profits in trading,” said Ben Davis, analyst at Liberum Capital Ltd. in London. “What made Glencore rich in the past is unlikely to happen again.”

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Nickel West just might be the biggest loser – by Barry FitzGerald (The Australian – August 6, 2015)

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

Mylanta and Panadol were in short supply as the 1700 mining types pushed through the final day of the Diggers & Dealers bash. “Go hard or go home” seemed to be mantra.

But while sympathy was in short supply for those delegates who had badly timed their runs, there was much on offer for our biggest miner, BHP Billiton.

Not that BHP was out and about. While it operates the Kalgoorlie nickel concentrator and smelter, BHP operatives are only seen in the shadows, if at all.

Anyway, BHP’s Nickel West division — the one that wasn’t good enough to shove in to the South32 spin-off — is doing it tough, real tough, as a result of the crash in nickel prices.

Talk around the conference is that it would be no surprise if Nickel West was losing tens of millions of dollars a month — that’s right, a month — at current prices for the stainless steel ingredient of $US4.86 a pound.

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Nunavik nickel firm wants to nearly double Raglan’s lifespan (Nunatsiaq News – July 27, 2015)

http://www.nunatsiaqonline.ca/

Glencore proposing to dig four new underground mines at Raglan

The operators of Nunavik’s Raglan nickel mine hope to expand its lifespan well beyond 2019, with the addition of five new underground mines across the region’s nickel belt.

Glencore, the corporation that operates Raglan and its four current underground mines, has submitted the project to the Kativik Environmental Quality Commission, which reviews the social and environmental impact of development in the region.

With current operations scheduled to wind down by 2019, Glencore completed a scoping study last year, the company said, which confirmed viable nickel deposits on the eastern half of the Raglan property. The first phase of the expansion would include two underground mines, called Mine 14 and Donaldson, which would operate from 2019 to 2032.

The exploitation of three new underground mines, Mine 8, Boundary and Boundary West, could extend production from 2023 to 2039, Glencore said in a preliminary information document submitted to the KEQC in 2014.

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Mine Games: Clash of the Commodity Kingpins – by Jeremy Kahn (Bloomberg News – July 14 2015)

http://www.bloomberg.com/

Glencore boss Ivan Glasenberg takes on Rio Tinto’s Sam Walsh—and an entire industry.

Sam Walsh, the mild-mannered Australian CEO of London-based mining giant Rio Tinto Group, insists he remains on cordial terms with Ivan Glasenberg, the brash South African who leads the global mining and commodities trading firm Glencore. Sure, Glasenberg approached Walsh’s boss—Rio Tinto Chairman Jandu Plessis—in July 2014 and proposed a merger that would likely have cost Walsh his job.

Sure, Glasenberg doesn’t miss a chance to tell the world that Walsh and his fellow Big Mining executives don’t comprehend the basic economics of supply and demand. Still, Walsh told the Times of London in December, “We’re big boys, and this is business. It’s not personal.”

Except it kind of is. Glasenberg’s argument is that Walsh and his fellow global mining executives “screwed up”—the phrase the commodities tycoon used in 2013—by flooding the world with minerals. Take iron ore, which is responsible for almost half of Rio Tinto’s revenue and more than two-thirds of its pretax profit.

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Coal bid sets up clash of mining heavyweights – by Neil Hume (Financial Times – July 1, 2015)

http://www.ft.com/intl/companies/mining

Ivan Glasenberg and Sir Mick Davies set to go head-to-head over the Hunter Valley

It is a tantalising prospect for deal junkies: Sir Mick Davis going head-to-head with his arch rival Ivan Glasenberg in a takeover fight.

And one that has become a possibility with news that X2 Resources, the private equity vehicle set up by Sir Mick, is in discussions with Rio Tinto about a possible bid for its Hunter Valley coal business in Australia.

There is no love lost between Sir Mick and Mr Glasenberg, two of the biggest names in the mining world. Their relationship soured three years ago when Glencore reworked its friendly merger with Xstrata into a full-blown takeover that ousted Sir Mick as chief executive.

Since then Sir Mick has come back leaner and, arguably, hungrier. He’s raised $5.6bn from investors to buy mining assets for X2, with additional debt backing from at least one leading bank. His notoriously large frame, which inspired part of his nickname, has slimmed down. But standing between Sir Mick and his first deal is the hyper-competitive man who removed him from his last job.

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Iron ore expansions drove down price: Glencore – by Matt Chambers (The Australian – June 5, 2015)

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

The most senior local executive at Swiss trading and mining giant Glencore has waded into the iron ore debate, saying rapid Australian expansions have driven down prices and cost the nation tax, royalties and superannuation dollars.

Speaking in Melbourne yesterday, Glencore coal mining chief Peter Freyberg said boomtime expansions that had seen Australian iron ore production surge and cost more than $US50 billion ($64bn) in development spending from Rio Tinto, BHP Billiton and Fortescue Metals, had been a negative exercise.

“The numbers speak for themselves — if you go back a couple of years, there were 500 million tonnes of (annual) export at $US100 a tonne,” Mr Freyberg said.

“That’s versus 700 million tonnes of exports today at $US60, so there’s a whole lot of revenue that’s gone missing following a bunch of investment.

“At the end of the day, (with respect to) the returns to Australia, into superannuation funds, through royalties, through taxes, it’s been a negative exercise.”

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We’re not cannibals:Glencore – by Greg Roberts (The West Australian – June 4, 2015)

https://au.news.yahoo.com/thewest/

Global miner Glencore has taken a swipe at Australia’s mining giants, saying their mass iron ore and coal expansions had “cannibalised” revenue and hurt the economy.

Glencore itself had been the first to take the responsible path of stopping its own coal expansions, which was good for the Australian mining industry, coal chief Peter Freyberg told a Melbourne Mining Club lunch.

His comments came a day after US coal giant Peabody Energy said it would axe up to 210 jobs and cut production by nearly half at a north Queensland mine as it struggled with falling prices.

Glencore announced it would cut 80 jobs and production from its north Queensland Collinsville coal mine last week.

Mr Freyberg said Glencore was exercising market discipline, cutting mining output, combining some of its NSW coal operations with Peabody’s and putting its $7 billion Queensland Wandoan coal mine project on hold.

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Coal Giants Left Unscathed by Growing Divestment Campaign – by Thomas Biesheuvel and Jesse Riseborough (Bloomberg News – June 3, 2015)

http://www.bloomberg.com/

The biggest names in mining have so far found themselves immune to a rapidly expanding campaign that’s seeking to curb the use of the most polluting fossil fuel.

From Norway’s $900 billion sovereign wealth fund to France’s biggest insurer and the Church of England, investors are starting to turn the screw on coal producers by selling down their holdings.

The criteria they use to select candidates for divestment exempts some of the biggest producers, however. That’s because those companies are large, diversified miners and only get a small part of their revenue from coal.

Dodging the divestment bullet, at least for now, are companies such as Glencore Plc, the world’s biggest exporter of coal used in power stations, BHP Billiton Ltd., Rio Tinto Group and Anglo American Plc. Between them they mine more than 350 million tons, about one third of the world’s coal trade.

“There’s a view that if they stop investing in it, or take a stance, that coal will go away,” said Mick Buffier, chairman of the World Coal Association and also an executive at Glencore. “Our view is different. Coal will continue to be needed. It’s going to be used by these developing nations. ”

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Gloomy Mining Chiefs See Copper-Tinted Light at End of Tunnel – by Firat Kayakiran, Jesse Riseborough and Agnieszka De Sousa (Bloomberg News – May 21, 2015)

http://www.bloomberg.com/

The world’s biggest mining companies haven’t agreed on much lately as they argue about how to deal with a glut of iron ore and coal. When the subject turns to copper, however, they’re on the same wavelength.

Executives of BHP Billiton Ltd., Antofagasta Plc, Rio Tinto Group, Freeport-McMoRan Inc. and Glencore Plc all pointed to copper in comments this month as the one commodity not dogged by oversupply. Demand is proving resilient, according to analysts who cite China’s response to a slowdown in economic growth by sanctioning a number of previously delayed infrastructure projects.

“If you’re looking for a single structural long-term bullish argument for owning a commodity, just look at copper,” said Clive Burstow, who helps manage $44 billion at Baring Asset Management in London.

In an interview last week, the head of the world’s largest mining company painted a gloomy picture for the industry. BHP’s Andrew Mackenzie said that in all the minerals markets in which it operates, any demand increase can too “easily” be met by expanding existing mines. One exception he sees is copper.

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It seems Sudbury really is the centre of the mining universe – by Staff (Northern Ontario Business – May 14, 2015)

http://www.northernlife.ca/

Greater Sudbury was represented at an awards gala held by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) in Montreal on May 11.

The annual event celebrates leaders in the Canadian mining industry and their many achievements over past years.

Northern Ontario winners include Christine Bertoli, recipient of the CIM-Bedford Canadian Young Mining Leaders Awards.

Based in Lively, Bertoli is the chief mine engineer of Nickel Rim South Mine for Sudbury Integrated Nickel Operations (Glencore). The award recognizes workers 39 years of age or under for exceptional achievement, as well as their potential for future leadership in various sectors of mining.

Sue Tessier of Val Caron was recognized with the CIM Community Service Award. Tessier, who enjoyed a 34-year career with Inco/Vale, is now retired and volunteers her time with a number of organizations, including the CIM Sudbury Branch, GO Eng Girl, and the Sudbury Regional Science Fair. This award recognizes unsung heroes for their contributions to the mining industry.

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Glencore CEO says rivals’ strategy tipping mining sector into crisis – by Silvia Antonioli (Reuters U.K. – May 12, 2015)

http://uk.reuters.com/

LONDON – The head of mining and commodity trading giant Glencore said on Tuesday the strategy of rival companies to oversupply the market regardless of demand had hit the mining sector’s credibility and tipped it into a confidence crisis.

Chief Executive Ivan Glasenberg has criticised competitors such as Anglo-Australian BHP Billiton (BHP.AX) (BLT.L) and Rio Tinto (RIO.L) (RIO.AX) several times for flooding the market with new, low-cost, iron ore supply which critics says has sent prices into a downward spiral.

“The mining sector is suffering a crisis of confidence,” he said in a presentation at an investor conference in Barcelona. “Oversupplying markets regardless of demand is damaging the credibility of the industry,”

He said mining had been the worst performing sector over the last twelve months, with commodity prices, share values and credit ratings all impacted. Investment flow has also weakened and was now about $60 billion below its 2012 peak, when the commodity supercycle turned sour, Glasenberg said.

Iron ore, oil, nickel and thermal coal were the hardest hit commodities in the last year.

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