Archive | Anglo American

Anglo’s Billionaire Investor Puts Mining on Cusp of M&A Era – by Jesse Riseborough, Dinesh Nair and Thomas Biesheuvel (Bloomberg News – March 17, 2017)

Anil Agarwal’s surprise move into Anglo American Plc suggests the mining industry may be on the cusp of a new wave of deals.

For years, Anglo has been the subject of takeover speculation and during the worst of the commodities crisis it seemed on the verge of a breakup. It spent last year getting back on firmer footing, but the 2 billion pound ($2.4 billion) investment by one-time Anglo suitor Agarwal has sparked the return of speculation about the company’s future.

“I’m pretty sure every investment banker in London is running around, dusting off old pitch books and going to every major in town,” Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, said by phone. “This feels to me a little like the last cycle, when the first mover precipitated a round of consolidation.” Continue Reading →

Billionaire Agarwal Plans to Buy $2.4 Billion Anglo Stake – by Ruth David, Dinesh Nair and Thomas Biesheuvel (Bloomberg News – March 15, 2017)

Anil Agarwal, an Indian mining billionaire, plans to buy as much as 2 billion pounds ($2.4 billion) of Anglo American Plc shares in the market after a merger proposal failed last year.

The full stake would equate to about 13 percent of Anglo’s stock, making Agarwal the second-largest shareholder after South Africa’s Public Investment Corp. It will give him a strong voice in the company’s strategy as the blue-chip British mining firm cements its recovery from a slump in commodity prices.

While Agarwal said the purchase was a family investment and he won’t make a takeover bid, the brash Indian tycoon offered to merge part his mining empire with Anglo American last year, only to be rebuffed. The London-based mining group, which is currently looking for a new chairman, is seen as a candidate for a potential break-up through splitting its South African assets from the global mining business. Continue Reading →

South Africa miners face ANC fight over black ownership plans – by Joseph Cotterill (Financial Times – February 25, 2017)

Johannesburg –  Corporate speeches usually avoid talk of a “difficult and dark” past. But this month Mark Cutifani, head of Anglo American, defended the South African mining industry’s record on opening up ownership to the country’s black majority.

With the government planning to shore up black participation in mining, the next few months are the most critical in the sector’s 150-year history, Mr Cutifani said. Many “still don’t understand” that the modern owners of South African mines are no longer the “Randlords”, he said, referring to the white industrialists who exploited black labour to establish the country as one of the world’s leading miners.

His speech was widely seen as a warning to the ruling African National Congress. Increasingly reliant on populist rhetoric as its support wanes and the economy stagnates, the government wants to consolidate black ownership in an industry that was once the country’s economic bedrock but is now declining. Continue Reading →

De Beers new diamond mine set to reach full commercial production – by Barbara Lewis and Susan Taylor (Reuters U.K. – February 22, 2017)

LONDON/TORONTO – Gahcho Kue diamond mine in Canada’s Northwest Territories is set to reach full commercial production over the next six weeks, the heads of Anglo American (AAL.L) unit De Beers and its Canadian partner Mountain Province Diamonds MPV.TO said on Tuesday.

First diamond production at the Arctic mine, the world’s largest and highest grade new diamond mine, began last year and has been gradually ramping up.

Output will be an average of 4.5 million carats per year over the anticipated 13-year life of the mine in which operator De Beers has a 51 percent stake, with the rest held by Mountain Province Diamonds. Continue Reading →

Mining Companies Are Back in the Black – by Scott Patterson and Rhiannon Hoyle (Wall Street Journal – February 21, 2017)

Coming out of a punishing downturn, executives are still cautious despite the return to profitability

The world’s biggest miners are profit machines again, cashing in on soaring commodity prices and rewarding investors who stuck with them through a brutal downturn.

BHP Billiton Ltd., the world’s largest miner by market value, said Tuesday it earned a net profit of $3.2 billion for the second half of 2016 after posting a $5.7 billion loss in the year-ago period. Anglo American PLC, the fifth-largest mining company, reported a net profit of $1.6 billion for all of 2016, a dramatic rebound from 2015, when it lost $5.6 billion.

The solid performance builds on strong results posted by British-Australian miner Rio Tinto PLC, which two weeks ago said it earned $4.6 billion in 2016 following a loss of $866 million in the prior year. Switzerland-based Glencore PLC is scheduled to release 2016 results on Thursday, with analysts widely predicting a return to profit. Continue Reading →

Miners Enjoy Fastest Comeback in a Decade on Surging Profits – by Kevin Crowley and David Stringer (Bloomberg News – February 21, 2017)

The speed of the mining recovery is faster than anything that’s been seen in the past decade. BHP Billiton Ltd. and Anglo American Plc on Tuesday reported the biggest profit increases since at least 2007 on deep cost cuts and rebounding metal prices. The earnings exceeded analysts estimates and highlight mining’s dramatic reversal of fortune in the past year.

The industry is coming back from a crisis that forced some of the top metal producers to sell assets, cut costs and rein in spending after years of over-investment. Metal prices have largely recovered from the downturn and several of the biggest mines are profitable, instead of bleeding cash.

“You can see how cash generative this business can be,” Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, said by phone. “I think 2017 is a year of strategic re-positioning and rethinking.” Continue Reading →

Mining giants ride copper’s price wave – by Scott Patterson (Dow Jones/The Australian – February 20, 2017)

Copper bulls are looking smart — for now. Some of the world’s biggest mining companies, which have giant copper portfolios, are now poised to reap the rewards, with Anglo American, BHP Billiton and Glencore set to report full- or half-year earnings this week.

The industrial metal has surged more than 30 per cent in the past year, providing rocket fuel for companies that were staring into the abyss a year ago. Shares in Anglo and Glencore have more than tripled in the past 12 months. BHP, which has faced headwinds from a fatal tailings-dam disaster at one of its mining operations in Brazil, is up 62 per cent.

Rio Tinto, which is focusing more on its copper business, offered a preview of how miners’ fortunes have flipped to the upside when it reported earnings earlier this month. The Anglo-Australian mining giant said it returned to a profit in 2016 with $US4.62 billion in earnings, increased its dividend and announced a $US500 million share buyback. Continue Reading →

[Anglo-American] Mining’s Octopus Regenerates – by David Fickling (Bloomberg News – February 16, 2017)

In its heyday, the business empire founded by Ernest Oppenheimer was likened to an octopus.The tangle of arms stretching from Anglo American Plc has at times embraced the world’s biggest miners of gold, platinum and diamonds; concrete plants; pulp and paper mills; banks; newspapers; car factories; a South African vineyard; and a stake in the brewer that eventually became SABMiller Plc.

Chief Executive Officer Mark Cutifani dramatically turned his back on that legacy last February. The still-sprawling business would get rid of 60 percent of its workforce and two-thirds of its mines and focus on a core of diamonds, platinum and copper, he told investors.

Operations in coal, iron ore, nickel, manganese, niobium and phosphates that collectively accounted for about 99.5 percent of the tonnage produced by the company would be put up for sale.The plan was wildly popular with investors, making Anglo American one of the five best-performing stocks in the Bloomberg World Mining Index during 2016 — but it’s now being mothballed. Continue Reading →

Anglo American urges South Africa to ‘stop the rot’ in mining – by Neil Hume and Joseph Cotterill (Financial Times – February 6, 2017)

Company calls for an investment-friendly law on black ownership of the sector

Cape Town – The chief executive of Anglo American has called on South Africa’s government to end a “20-year rot” in the country’s mining industry by issuing investment-friendly legislation about black ownership of the sector’s companies.

Mark Cutifani said the next three to four months would be the “most important for the South African mining industry in 150 years”, with the ruling African National Congress overhauling laws to redress economic inequality in the sector.

“We’ve had an industry [in South Africa] that’s been shrinking for 20 years. If we are going to stop the rot, we need a document and a framework that encourages investment,” Mr Cutifani told the Financial Times on the sidelines of a mining conference in Cape Town. Continue Reading →

Anglo sees incremental gains as trading unit hits cruising speed – by Clara Ferreira-Marques (Reuters U.S. – Janaury 23, 2017)

Anglo American Plc (AAL.L), which broke with tradition when it set up a focused commercial unit, sees modest improvements ahead after an early boost to profits, as it gets closer to clients, even offering shelter from volatile markets with fixed-price contracts.

Anglo, like many miners, shied away from directly trading its own material for decades, selling instead largely through intermediaries such as established trading houses.

That changed in 2013 under Chief Executive Mark Cutifani, as Anglo sought a direct connection with customers to get more value from every tonne of material sold, a move which added more than $400 million to underlying operating profit in two years. Continue Reading →

Anglo American’s future may lie outside South Africa – by Gavin du Venage (The National – December 21, 2016)

Anglo American, the corporation that helped turn South Africa into the world’s gem and gold supplier, may finally be ready to quit the country it helped shape for about a century.

Anglo, as it is mostly called, was once a cradle-to-grave employer that owned not just vast diamond, gold and other mineral assets, but a cross-section of South African industries spanning most sectors. At its height in the 1980s, Anglo owned food producers, packaging companies and others.

So pervasive was its influence that in the media sector, it owned shares in rival newspaper firms, the paper mills they depended on and even the very forests these fed on. It was, however, minerals that ran through Anglo’s corporate culture, and which were its main focus. Continue Reading →

Miners sharpen marketing strategies in hunt for marginal gains – by Barbara Lewis and Gavin Maguire (Daily Mail/Reuters – December 20, 2016)

LONDON/SINGAPORE, Dec 20 (Reuters) – The world’s big mining groups are sharpening their marketing strategies in a post-crisis scramble for even tiny increases in profit, seeking marginal gains much like cycling teams in the Tour de France or Olympic velodrome.

Anglo American, BHP Billiton and Rio Tinto are using varying tactics to boost profitability on commodities such as copper, iron ore and coal, as the traditional model of simply producing more is under strain and the recovery from a deep downturn remains tentative.

The one thing in common is a philosophy championed by cycling coach Dave Brailsford: achieve marginal gains in as many areas as possible and the overall performance of the rider – or in this case the business – will improve significantly. Continue Reading →

Why De Beers is Flooding a Subarctic Diamond Mine After 8 Years – by Danielle Bochove (Bloomberg News – December 16, 2016)

Anglo American Plc’s De Beers will flood a massive diamond mine located beneath a subarctic lake in Canada’s Northwest Territories after failing to find a buyer.

De Beers will begin inundating tunnels at its Snap Lake mine in early January, it said in a statement distributed late Thursday. In April, it put the site on care and maintenance, saying it would decide whether the mine could be made viable in the next year. The company hired Bank of Montreal as an adviser to sell it, but no agreement could be reached.

The rich diamond deposit beneath Snap Lake is in a remote area 220 kilometers (137 miles) northeast of Yellowknife. Since it opened in 2008, it has never turned a profit, plagued by engineering challenges related to keeping the site dry. It was originally expected to operate until 2028. Continue Reading →

Anglo Confronts Divorce in Miner’s South Africa Birthplace – by Thomas Biesheuvel and Kevin Crowley (Bloomberg News – December 8, 2016)

In 1917, Ernest Oppenheimer met with South African general and soon-to-be prime minister Jan Smuts to seek his blessing for a new mining company called Anglo American. Smuts wanted one assurance — the company was there for the long haul.

Anglo, along with its sister company De Beers, made Oppenheimer a billionaire and his descendants one of Africa’s richest families. The company became South Africa’s biggest, a conglomerate once spanning brewing, publishing and gold mining. Now a century later, Anglo is trying to cut many of the ties with the country where it all began.

While South African mines were cash cows for decades, Anglo now wants to sell them next year to cut debt accumulated during the commodity boom, when it spent $14 billion on Brazil’s Minas-Rio. How to package the assets and which to include will be major choices for Anglo, and it faces opposition from a government pension fund that is also the biggest investor. With so much history and national identity wrapped up in the company, it will be a complicated divorce. Continue Reading →

Hooded protesters shut down Los Bronces copper mine in Chile again – by Fabian Cambero (Reuters U.K – November 26, 2016)

LIMA – Global miner Anglo American Plc (AAL.L) halted all activity at its Los Bronces mine in Chile after hooded protesters seized installations early on Saturday in the second illegal occupation of the copper deposit this month, the company told Reuters.

Anglo said it was not certain who the protesters were. The latest seizure immediately followed what Anglo called an agreement between companies it uses to provide services at the mine and the Federation of Contract Workers union.

But the union indicated that it was not satisfied, and would continue to demand better contracts for workers, blaming Anglo American for an “insufficient” offer given the rise in the company’s shares, which spiked with the price of copper after Donald Trump’s surprise victory in the U.S. presidential election earlier this month. Continue Reading →