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Glencore digging deeper for new Sudbury mines – by Jonathan Migneault (Sudbury Northern Life – Oct 23, 2014)

http://www.northernlife.ca/

If approved, Onaping Mine will go as deep as 2,700 metres (8,858 feet)

The future of Glencore’s nickel operations in Sudbury will require deeper mines to access previously untapped deposits, said Marc Boissonneault, the company’s vice-president of Sudbury nickel operations.

Boisonneault, who addressed the Greater Sudbury Chamber of Commerce Tuesday, said the mining giant is eyeing two potential Sudbury developments that would require mine shafts as deep as 2,700 metres.

The first project is Onaping Mine, a site that was discovered years ago, but contains ultra-deep deposits that could not be safely accessed until recently.

Glencore estimates the mine contains 15.7 million tonnes of nickel deposits at higher grades than average for the Sudbury Basin, and would require a capital expenditure of $547 million to develop.

The company is expected to complete a pre-feasibility study for the project later in the year, and will decide by the first or second quarter next year whether it would be worthwhile to mine the deep deposits. “Given our life of mine situation, we would like to get started on it soon,” Boissonneault said.

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Mining Force Mick Davis Digs In Again – by Alexis Flynn (Wall Street Journal – October 19, 2014)

http://online.wsj.com/home-page

With Xstrata Veterans, He Looks to Build Another Powerhouse

LONDON—After building two mining giants in the past two decades, can Mick Davis start from scratch and do it again?

Mr. Davis, 56 years old, is entering the fray again just as companies such as BHP Billiton and Anglo American PLC look to sell off unfavored assets. He is looking to build another mining powerhouse after Xstrata PLC, the Anglo-Swiss company he led for a decade, was taken over last year by Glencore PLC, headed by fellow South African Ivan Glasenberg.

The deal had been conceived initially as a merger of equals, with Mr. Davis slated to be its chief executive. But after resistance from crucial Xstrata shareholders, Mr. Glasenberg recast the deal as a takeover and seized the top job.

Mr. Davis’s new venture, X2 Resources, has raised as much as $4.8 billion from several investors, including commodities trader Noble Group and private-equity firm TPG.

His re-emergence alongside a team of mostly Xstrata veterans comes amid a slump in commodity prices that has put pressure on mining bosses to trim their portfolios.

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What is Glencore’s wily boss up to? – by Ben Marlow (The Telegraph – October 18, 2014)

http://www.telegraph.co.uk/

After Rio Tinto revealed it had recently rejected Glencore, CEO Ivan Glasenberg is plotting his next move

There’s a new game being played in the City at the moment, called “guess what Ivan does next” where participants try to predict what deal Ivan Glasenberg, the chief executive of the commodities giant Glencore, is secretly cooking up.

If it sounds simple, it isn’t. Few individuals encapsulate the term “dealmaker” as perfectly as Glasenberg. A former trader, it is something that genuinely seems to be in his DNA and that has undoubtedly enabled him to turn Glencore into the unparalleled force that is today.

That means two things: firstly, he is likely to keep everyone guessing; and secondly, anything could be on the menu.

The latter point was confirmed a fortnight ago, when Rio Tinto, the world’s biggest iron ore miner, revealed that it had recently rejected a $140bn (£87bn) merger proposal from Glencore. With the company responding by saying it was no longer looking at the deal, under the UK Takeover Code Glencore now has to wait six months before it can attempt the ambitious move again.

Most observers believe Glasenberg will spend that time putting together another bid and it is easy to see why.

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Glencore and BHP Billiton face off in clash of the mining titans – by Andrew Critchlow (The Telegraph – October 11, 2014)

http://www.telegraph.co.uk/

Glencore’s Ivan Glasenberg and his counterpart at BHP Billiton were breaking bread a day after details of the $160bn “GlenTinto” deal emerged. But how much longer can these mining titans remain friends?

Ivan Glasenberg and Andrew Mackenzie — the two biggest names in global mining — had their eyes firmly fixed on each other as they were locked deep in intense conversation during a private lunch last Wednesday at the Santini restaurant in Belgravia.

Just 24 hours earlier Glasenberg, the billionaire South African chief executive of Glencore, had revealed to the market details of an audacious bid to take over Rio Tinto – currently one of the biggest rivals of BHP Billiton, the Anglo-Australian mining giant led by Mackenzie. If successful, the merger would have flipped the entire mining industry on its head.

Whether it was a remarkable coincidence, or just another routine meeting between two powerful chief executives, the lunch could not have been more timely, given the profound challenges facing the global resources industry following the recent slump in iron ore prices and concerns that the decade-long bull run for mining companies has run its course.

Although it is understood that the lunch had been in their diaries for at least a month, both men had plenty to talk about, especially so soon after Glasenberg’s failed bid to create a $160bn (£100bn) merged company that the City has already dubbed “GlenTinto”.

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Glencore Held Talks With Cliffs Natural Resources Over Iron-Ore Assets – ALISTAIR MACDONALD, ALEXIS FLYNN and JOHN W. MILLER CONNECT (Wall Street Journal – October 10, 2014)

http://online.wsj.com/home-page

Glencore Was Spurned by Rio Tinto Earlier This Year

Spurned by Rio Tinto RIO.AU -3.00% PLC, Glencore GLNCY -2.40% PLC CEO Ivan Glasenberg continued to look at other potential iron ore targets with a call to U.S. miner Cliffs Natural Resources Inc., CLF -0.95% according to people familiar with the matter.

Glencore talked to Cliffs about its Australian iron ore assets around a month ago, these people said. While that conversation was described as very preliminary, the call underscores that Mr. Glasenberg isn’t placing all his iron ore ambitions on another attempt at Rio Tinto.

Earlier this week, Rio Tinto said Glencore had approached it in July about a possible takeover, which would have created the world’s biggest mining company by value.

Glencore isn’t a major producer of iron ore but has a large marketing arm that trades the product for other miners. Buying up active miners, or combining with Rio Tinto, would allow it to trade its own product, and potentially to bolster prices by closing mines or delaying expansion.

The Swiss-based commodities giant, whose portfolio ranges from cotton to zinc and grains, is prohibited under U.K. takeover rules from making a new approach on Rio Tinto for at least six months. But as Mr. Glasenberg weighs whether to make a second attempt on London-listed Rio, he still retains an open mind on other iron-ore assets, according to two London-based bankers.

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Glencore-Rio Has Industry Evaluating Future: Real M&A – by Jesse Riseborough, David Stringer and James Paton (Bloomberg News – October 8, 2014)

http://www.bloomberg.com/

The prospect of Glencore Plc (GLEN) buying Rio Tinto Group is sending reverberations through the mining industry that could prompt more deal talks.

Combining Glencore and Rio, which both confirmed they held informal discussions in July, would create a $162 billion behemoth. That such a merger would even be attempted speaks to the pressure the industry is under to cut costs and increase shareholder value amid declining prices for commodities.

A slump in iron ore gave Glencore a chance to go after a cheaper Rio and make it part of a diversified portfolio. With the deal now likely on hold for six months, Glencore could turn to other targets such as Fortescue Metals Group Ltd. (FMG) Or Rio could pursue a defensive deal with a company such as Anglo American Plc (AAL), according to Sanford C. Bernstein & Co.

“This is a hell of a thing they’re proposing,” Paul Gait, an analyst at Bernstein, said in a phone interview. In the past, “we have had that kind of one action precipitate a whole cascade of events that puts a number of other guys in play.”

Glencore approached Rio in July about a merger, and Rio rejected the idea a month later. Rio Chairman Jan du Plessis says the $92 billion company is better off with its current strategy of cutting costs and returning cash to investors.

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Vale and Glencore not innovative enough: Penguin CEO – by Jonathan Migneault (Sudbury Northern Life – October 08, 2014)

http://www.northernlife.ca/

Local mining tech company representative critical of local miners

Sudbury’s largest mining companies, Vale and Glencore, lack innovation, says the chairman of a local mining robotics and technology company.

“I do absolutely no work in this city. I wouldn’t want to, and I don’t need to,” said Greg Baiden, chairman and CEO of Penguin Automated Systems, a Naughton-based mining supply and services company that specializes in advanced robotics, data communications technologies and positioning systems. “I don’t do it because I don’t find the people in the mining companies here very innovative.”

Penguin Automated Systems has instead relied on work with mining companies in South Africa and South America to solve specific and complex problems with advanced technologies.

The company also has contracts with the United States’ State Department, and with NASA, to explore ways to mine in space. Baiden made the comments at the launch of the 2014 Greater Sudbury Vital Signs report Tuesday.

The report is an annual checkup on how the city is performing in a number of areas, including the economy, the environment, education, health and wellness, and housing.

This year, the report had a special section on mining innovation, and Baiden, along with other industry experts, was invited to speak on the topic in a panel discussion.

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COLUMN-Glencore-Rio proposal not the right iron ore deal – by Clyde Russell (Reuters U.S. – October 7, 2014)

http://www.reuters.com/

Oct 7 (Reuters) – The hullabaloo surrounding Glencore Plc’s spurned approach to rival miner Rio Tinto shows why this is probably the wrong deal at the right time.

Glencore’s proposal to create a $160 billion behemoth is certainly audacious, and may even make sense for shareholders of both companies if priced attractively.

But even if it were successful, such a deal would do little resolve the key problems bedevilling the outlook for many commodity markets, and the companies that produce those resources.

The logic of Glencore taking control of Rio Tinto would be for the former to get access to the latter’s iron ore operations in Australia, which are the lowest cost among major producers.

Iron ore is the missing arrow in Glencore’s quiver, and the assumption behind a deal would be that the Swiss-based company would be able to use its trading nous to extract more value from the well-run Rio Tinto mines.

Assuming that all the anti-trust and other regulatory obstacles could be overcome, and that Rio Tinto shareholders could be won over, then the potential for the deal to be rewarding for Glencore is compelling.

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Rio Tinto rejects Glencore merger approach amid iron ore slump – by Sonali Paul (Reuters U.S. – October 7, 2014)

http://www.reuters.com/

MELBOURNE – (Reuters) – Rio Tinto rejected a merger approach from smaller rival Glencore Plc to create a $160 billion mining and trading giant in August just as the price of its most profitable product, iron ore, slid toward a five-year low.

The miner said on Tuesday Glencore had contacted it about a potential merger in July, adding that it turned Glencore down in August and there had been no further contact between the companies on a deal.

A merger would have created the world’s biggest miner, supplanting BHP Billiton. “The Rio Tinto board, after consultation with its financial and legal advisers, concluded unanimously that a combination was not in the best interests of Rio Tinto’s shareholders,” Rio Tinto said in a statement to the Australian stock exchange.

Rio’s Australian shares jumped as much as 4.7 percent to a 9-day high of A$60.28 in a weaker broader market after the company issued the statement.

Rio revealed the approach after Bloomberg reported that Glencore had talked to Rio’s top shareholder, Chinese state-owned Aluminum Corp of China (Chinalco) [ALUMI.UL], to gauge its interest in a deal.

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Glencore, Rio Tinto merger whispers leave analysts skeptical over financial details – by Eric Reguly (Globe and Mail – October 7, 2014)

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.

ROME — Is Glencore CEO Ivan Glasenberg about to strike again? The great white shark of the global commodities industry is laying the groundwork for a blockbuster deal that would see Glencore Xstrata PLC merge with Rio Tinto Group to create a mining giant that would displace BHP Billiton Ltd. as the world’s top mining company, Bloomberg reported on Monday.

A Glencore spokesman in Switzerland would not confirm or deny that Glencore, the world’s biggest trader of commodities, from coal to grain, is contemplating a merger with Rio Tinto. “No comment,” he said.

Rio Tinto said late Tuesday that it had rejected a merger approach from its smaller rival in August, finally responding to a string of media reports over the past month that have said Glencore wanted to merge with Rio. It also said there had been no further contact between the companies on a merger.

“The Rio Tinto board, after consultation with its financial and legal advisers, concluded unanimously that a combination was not in the best interests of Rio Tinto’s shareholders,” Rio Tinto said in a statement to the Australian stock exchange.

The American depository receipts (ADRs) of Rio shot up 18 per cent after the Bloomberg story appeared, then slipped back for an 8 per cent gain. On the London exchange, Rio shares rose 1.6 per cent, giving it a market value of £56.3-billion.

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Glencore Said to Lay Groundwork for Potential Rio Merger – by Matthew Campbell, Anousha Sakoui and Dinesh Nair (Bloomberg News – October 6, 2014)

http://www.bloomberg.com/

Glencore Plc (GLEN) is laying the groundwork for a potential merger with Rio Tinto Group (RIO) in the next year that would create the world’s largest mining company, worth about $160 billion, according to people familiar with the situation.

As a preliminary step, Glencore has reached out to Aluminum Corp. of China, the Chinese state-backed company that is Rio’s largest shareholder, to gauge its interest in a potential deal, said two of the people, who asked not to be identified because the matter is private. The discussions with the company, which is known as Chinalco and controls about 9.8 percent of Rio, took place in recent weeks, one of them said.

Rio executives are well aware of Glencore Chief Executive Officer Ivan Glasenberg’s interest in a deal, which has been made clear in informal settings, the people said. However, no talks are underway between the two companies, no formal offer has been made, none is likely before the end of 2014, and Glencore could decide against an offer, they said.

Glencore views Chinalco as potentially supportive of a change in control after the Chinese company failed to secure a board seat at Rio and has seen little progress on a joint iron-ore project in Guinea, one of the people said. Glencore is also gauging the views of other Rio shareholders, and studying the tactical, financial, and regulatory obstacles to the deal as it considers its next steps, the people said.

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Supply a critical issue for suitors of Nickel West – by Tess Ingram (sydney Morning Herald – October 3, 2014)

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

Possible buyers for BHP Billiton’s Nickel West business are scrutinising the sector’s junior miners as they weigh up the potential for long-term supply for one of its key assets, the Kalgoorlie smelter.

The sale of the Nickel West business has been under way for some months and industry sources suggest interested buyers have been narrowed down to resources giants Glencore and Jinchuan Group.

Any buyer of the West Australian assets would have to work with local nickel producers to secure supply for the smelter, which has run about 10 per cent under capacity and at a high cost for BHP, with industry suggesting that either a secure offtake agreement or an acquisition of a local player is highly likely.

Fingers appear to be pointing towards both Western Areas and Sirius Resources due to the quality of their nickel concentrate and their relative freedom to sign a deal.

Western Areas managing director Dan Lougher confirmed that the company had been in talks with prospective buyers, including Glencore and Jinchuan, but had not yet been approached in regards to an acquisition.

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Glencore, Rio Tinto could save $500m by merging coal operations – by Sarah-Jane Tasker (The Australian – October 1, 2014)

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

DIVERSIFIED miners Rio Tinto and Glencore could target $500 million in annual savings if they merge their NSW coal operations, analysts on a site tour of the Swiss giant’s assets have flagged.

Glencore, rumoured to be eyeing acquisitions, highlighted the significant synergy potential with Rio Tinto in the Hunter Valley region given the two miners had many adjacent assets.

“These have not been quantified but could total close to $500m per annum pretax, and relate to overhead reduction, mining efficiencies, logistics and blending,” Credit Suisse analyst Liam Fitzpatrick said. “Despite this, there appears to have been very limited progress between the two companies.”

Recent media reports have suggested Glencore chief Ivan Glasenberg has Rio on his acquisition wish list, but neither company has weighed in on market speculation.

Glencore kicked off a sell-side analysts tour of its Australian ¬assets this week with a visit to its coal operations, and the head of coal assets, Peter Freyberg, told those on the trip the company had a “synergistic and targeted acquisition strategy”.

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Ivan Glasenberg ponders Glencore’s next move – by James Wilson and Neil Hume (Financial Times – September 15, 2014)

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

Ivan Glasenberg, the chief executive of Glencore, demonstrated in a 48-hour period this year why the Switzerland-based group occupies a singular place among the world’s biggest mining companies.

With acquisitions taboo for most large miners after a decade-long spending binge, perhaps only the ebullient trader would have followed a $5.85bn disposal of a Peruvian copper mine with the $1.35bn purchase of Caracal, a west African oil explorer, a day later.

The flurry of activity showed not only that Mr Glasenberg has retained his eye for an opportunity after the $80bn purchase of Xstrata last year, but also that he has a unique mandate to grow via acquisition, at a time when peers such as BHP Billiton are reversing years of dealmaking growth and streamlining their businesses.

“The market believes the Glencore management team are a solid allocator of capital,” says Dominic O’Kane, analyst at JPMorgan.

“What Ivan buys next” has been a favourite mining sector parlour game even before Glencore’s stock market flotation in 2011. Now it is likely to be played with increasing interest. Glencore has digested most of Xstrata as well as Viterra, a Canadian grain trader it bought for C$6.1bn in 2012, and can take advantage of opportunities while rivals stick to a diet of austerity.

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Ring of Fire development plans spurred by Ontario’s outrageous energy prices – by Peter Koven (National Post – September 16, 2014)

The National Post is Canada’s second largest national paper.

As Dominic Fragomeni recalls it, his firm’s big idea for the Ring of Fire just came from a willingness to try something new.

“Innovation comes from people sitting back and thinking about what’s possible given their experience and background,” the director of XPS Consulting & Testwork Services said in an interview.

“That’s basically how these ideas were hatched. Our guys have 30-plus years of experience in metallurgical engineering and have tested a lot of different concepts in their day.”

Northern Ontario’s remote “Ring of Fire,”a huge mineral belt named after the Johnny Cash song, is the most exciting new mining opportunity the province has seen in decades. Rough estimates suggest the region could hold $60-billion worth of minerals, with chromite being the most important.

But moving the project to development has been a very slow and arduous task, as stakeholders have struggled to find solutions around key challenges like infrastructure.

One of biggest obstacles is power supply. Processing chromium ore is extremely energy-intensive, requiring a whopping four megawatts per tonne of ore. To support the Ring of Fire, there were plans to build a 300-megawatt smelter near Sudbury. That is enough electricity to power a city of roughly 300,000 people.

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