Aluminum and Copper

The world`s biggest miners want more copper but nobody`s selling

The world`s biggest miners want more copper but nobody`s selling
Mining News Pro - LONDON – It’s the mining world’s biggest dilemma: everyone’s hunting for copper deals, but even the richest producers just can’t pull the trigger.
  Zoom:

The largest miners all say they’re bullish on copper and looking for growth in the metal that’s forecast to be in ever-greater demand as cities expand and electric vehicles gain traction. The industry has deep pockets for deals right now – Rio Tinto Group may end the year having raised $8.5-billion from asset sales and rivals like BHP Billiton and Glencore are churning out massive profits.

So what’s the problem? For a start, nobody who owns a copper mine wants to give it up. Even when Glencore and Anglo American Plc were crippled by debt during the 2015 commodity slump, neither was willing to entertain an offer from Rio for their holdings in the giant Collahuasi deposit in Chile, according to people familiar with those talks, who asked not to be identified.
When it comes to listed companies, there aren’t that many options – US-based Freeport-McMoRan and Canada’s First Quantum Minerals are among the only copper-focused producers of any real size.

Any company with half a balance sheet is not going to be selling a copper asset at this point,” said Richard Knights , an analyst at Liberum Capital Markets. “The only place they can extract value is development assets, where they buy and develop themselves.


Despite the growing cash piles, mining companies and their investors will be wary of pricey deals after much of the industry got burned by overpaying for assets during the last commodities boom.

Still, copper’s appeal may be tough to resist.

There’s no question” that both Rio and larger rival BHP Billiton would look at big copper deals, said Knights. “They would have to pay up though, that’s where investor support and and management conviction could waiver.

Here’s how things might shake out among the world’s biggest miners:
RIO TINTO
Rio is best-positioned to capitalize on potential deals. The company is making more cash then it knows what to do with, has almost no debt and, aside from a simmering dispute in Mongolia, none of the distractions dogging its rivals. Rio agreed to sell its interest in the Grasberg copper and gold mine for $3.5-billion last week, and has pending coal and aluminum sales also set to close this year.

Rio approached Anglo and Glencore in 2015 with an offer for their holdings in Collahuasi, which is one of the world’s most profitable copper mines, but was quickly rebuffed by both companies, according to the people familiar with the matter. All three companies declined to comment.

Today, Rio is keeping a “ watching brief” on potential M&A and would like to add more copper, CEO Jean-Sebastien Jacques said in a Bloomberg TV interview last week.
Still, the company’s appetite for big deals is uncertain. The No. 2 miner may prefer working with a partner on any acquisitions and focusing on smaller opportunities. It would also need to sell any deal to skeptical shareholders.

 

BHP BILLITON
BHP is also cash rich and keen for more copper. Yet it’s got more pressing concerns in the form of activist shareholder Elliott Management Corp. and an ongoing sale process for its $10-billion shale business. The biggest miner has also stated that big deals are not its priority, with new chairperson Ken Mackenzie saying earlier this month that the asset portfolio will be close to ideal once the US oil and gas assets have been sold.

GLENCORE
The world’s most acquisitive miner, Glencore, is currently facing a probe from US authorities that may dampen its ability to pursue big deals. The company will spend up to $1-billion buying back its own shares this year to soothe the fallout from the probe.


ANGLO AMERICAN
Anglo’s response to the lack of opportunities has been to build its own new copper mine, with the company’s board set to approve a new $6-billion project in Peru. While partner Mitshubishi Corp. will help share the burden of funding, the large price tag makes the London-based miner unlikely to make any big purchases.

Anglo’s own copper assets might be of interest though. India’s LiveMint reported this month that top shareholder Anil Agarwal is considering a plan to split the miner’s South African assets into a new company, citing unidentified people. Such a deal would leave the rump of the international business dominated by copper and diamonds.


   Short Link:  
Related News
Esfahan Mobarakeh Steel co.
HOSCO
khuzestan steel
chadormalu Co.
ghadir neiriz co
IranAluminaJaajarm
sangan steel
ahan o fulad golgohar