May 17, 2020

Report: Rio Tinto ready to talk M&A deals

Operations
mine sites
mergers
Acquisitions
Admin
2 min
Report: Rio Tinto ready to talk M&A deals
The worlds second largest mining company is getting back in the saddle again.Rio Tinto indicated at a recent analyst meeting that it is ready to conside...

The world’s second largest mining company is getting back in the saddle again.

Rio Tinto indicated at a recent analyst meeting that it is ready to consider mergers and acquisitions again, said a Morgan Stanley report, but only if it can secure the right asset at the correct valuation and win investor support. With the mining sector hovering at the bottom of the cycle, the time could be now for Rio to pull the trigger.

• 2015: Year of the Mega Mergers

The company has been linked with several potential suitors such as Freeport-McMoRan Inc., Anglo American Plc and Glencore. CEO Sam Walsh has repeatedly said his company is neither interested in acquisitions nor has any short term plans of merging with anyone.

“If they can buy tier-one assets at valuations that are closer to the bottom of the cycle, then that’s not a stupid thing to do,” said Jason Beddow, chief executive officer of Argo Investments. “As asset valuations get pushed lower, larger producers may be changing their attitude toward deals.”

Mining deals fell to $51.3 billion in 2014, the lowest total in 10 years, according to Bloomberg.

Still, Rio Tinto doesn’t have the best deal-making history, suffering from the $38 billion purchase of Alcan in 2007 -- which resulted in $8.9 billion write-downs -- and its dreadful coal deal in Mozambique. However, the company is in the right place to make a deal.

After reducing its project budget to the lowest since 2010, cut spending and complete a $ 2 billion share buyback, investors may accept acquisitions, according to Beddow.

“They may need to consider that this could be a better use of capital than just buying back shares.”

An acquisition would be Rio’s first since 2012.

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May 14, 2021

Copper production from top ten companies to increase by 3.8%

Copper
Codelco
First Quantum
Freeport-McMoRan
2 min
Following a marginal slump in copper production due to COVID-19, output from top ten companies set to rise up to 3.8% in 2021 reveals GlobalData analysis

Copper production from the world’s top companies is set to increase by up to 3.8% this year, following a fall of 0.2% in 2020, GlobalData analysis reveals. Last year’s marginal slump saw production drop to 11.76 million tonnes (Mt).

Copper

The initial impact of the COVID-19 pandemic on mining operations was immense, however, six of the ten largest copper producers succeeded in increasing output last year. In 2021, copper production from the top ten copper companies is expected to bounce back, rising by up to 3.8%, to reach 12.2Mt, according to GlobalData, a leading data and analytics company. 

First Quantum

The highest increase in copper production was by Canada’s First Quantum, which, despite all the challenges, reported 10.4% growth in 2020. The company’s Sentinel mine in Zambia and Cobre Panama were key contributors to this growth. While the latter remained under care and maintenance between April and August 2020, it delivered record production levels during the subsequent months.

Copper

Codelco

Codelco, the world’s largest producer of the red metal used in electric vehicles, also bucked the trend.

Vinneth Bajaj, Associate Project Manager at GlobalData, commented: “Despite Codelco reporting over 3,400 active cases during July 2020, the company achieved 1.2% growth in its production in 2020. The company implemented a four-phase plan, as part of the COVID-19 measures, to ensure the health and safety of its employees, while also avoiding any significant impact to its copper output.” 

Freeport McMoRan

Although the overall impact was minimal, declines in production were observed from Glencore (8.2%), Antofagasta (4.7%), BHP (3.9%) and Freeport McMoRan (1.3%). Reduced operational workforces due to COVID-19 measures, lower ore grades and production halts due to maintenance were the key disruptors to output during 2020.

Electric Vehicles

The move towards electric vehicles and clean energy from renewables sources such as solar panels and wind turbines has driven the copper price to all-time highs. Copper has been among the best performers over the last month where metals ranging from aluminum to iron ore have surged to their highest prices in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the global pandemic. 

 

 

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