Breakingviews

Commodity producer/trader boundary starts to blur

October 14, 2014

Glencore’s interest in a deal with Rio Tinto was about more than corporate ambition. Commodity traders are keen to buy hard assets to secure supply, while producers view logistics and marketing as a way of boosting returns. Expect more convergence, and shrinking trading margins.

Tempting mining valuations aren’t hard to resist

May 17, 2012

The big miners were flirting with decade-low valuations even before the sector took an outsize hit in the recent sell-off. But that won’t necessarily lure bargain hunters. With margins already fat, Chinese demand weakening and costs rising, there’s no compelling equity story.

Shale writedown tarnishes BHP’s street cred

August 3, 2012

The miner isn’t the only company to overpay for U.S. shale. But a $2.8 bln writedown on acreage it bought for $4.75 bln last year is embarrassing for a group that trades on its canny reputation. Gas may pay off for BHP eventually, but Marius Kloppers is right to waive his bonus.

Marius Kloppers will be hard act to follow at BHP

February 20, 2013

The miner’s outgoing boss benefited from great assets, management discipline, a bull market, and some luck. BHP’s returns were solid under Kloppers, despite the financial crisis. His successor, Andrew Mackenzie, will stick to the formula, but he’ll need more luck to do as well.

Canada may have shot itself in the foot on Potash

November 4, 2010

Canada may have just shot itself in the foot. The Ottawa government said BHP's $39 billion takeover bid for Potash Corp provided no net benefit to the nation. There's some basis for this in the specific instance. But what the decision fails to reflect is the long-term damage such a politicized rejection does to Canada's ability to attract capital.

Blocking BHP’s Potash bid could damage Canada

November 2, 2010

Blocking BHP's move on Potash Corp could be damaging for Canada.

Potash CEO’s big payday won’t decide the deal

By Christopher Swann
August 25, 2010

Half a billion dollars is normally sufficient to sway the minds of mortals. But in the case of Potash Corp's potential sale to BHP Billiton, don't expect such a big payday to decide the outcome of the deal. The fertilizer miner's boss Bill Doyle has sat on larger sums before and held tight. With his golden parachute less than 6 percent of the payoff, he has no obvious incentive to shortchange shareholders with a quick flip of the company.

BHP shows it doesn’t need Potash Corp

August 25, 2010

BHP Billiton has shown it doesn't need to buy Canada's Potash Corp. The Anglo-Australian miner's impressive annual results are a reminder of the financial firepower behind its $39 billion hostile bid for the world's largest fertiliser group. But they also show that BHP is not broken -- and that chief executive Marius Kloppers does not need to bet a strong balance sheet on further diversification.

Big miners adjust, slowly, to austere times

August 20, 2013

Glencore and BHP Billiton are on opposite sides of the mining spectrum. But both the trader and the low-cost producer are girding for a long, slow period with goodwill writedowns and leaner investments. The strategy is right, but shareholders will have to wait for rewards.