Breakingviews

OPEC freeze failure could hasten oil’s recovery

April 18, 2016

Producers failed to agree a deal to freeze supply at a meeting in Doha. The failure was largely due to Saudi Arabia’s refusal to allow Iran to be exempted from an agreement. Prices will drop initially, but if OPEC disintegrates the stalemate could hasten crude’s recovery.

BP’s $20 mln Dudley payout looks crass but isn’t

April 14, 2016

The oil major faces an uproar over Chief Executive Bob Dudley’s bumper remuneration package despite the company slashing jobs and recording losses last year. But the criticism may be unfair. Dudley has hit key targets and drawn a line under the Gulf of Mexico disaster.

BHP admits dividend pledges and mining don’t mix

February 23, 2016

The world’s largest miner slashed its interim dividend 74 pct and followed rival Rio in scrapping a “progressive” policy. About time. Promising payouts will only ever go up is daft in such a cyclical sector. Consistency matters less than safeguarding the balance sheet.

Gold’s prospects are dull

January 25, 2016

The precious metal isn’t behaving like a safe haven should. The dollar’s rise is weighing on its price, Asian demand is dented, investors don’t need inflation hedges, and past price gyrations have tarnished its defensive allure. Grimmer news is needed to restore gold’s lustre.

Sweeter Cairn bid is Vedanta’s least bad option

January 25, 2016

Anil Agarwal’s Vedanta Resources is edging towards loan covenant limits. Bondholders are losing faith in the mining tycoon’s ability to tap buried cash and repay $8 bln of debt. The stress may force Agarwal to sweeten a deal to merge subsidiaries and simplify the group structure.

BHP Billiton plays catch-up with $7 bln shale hit

January 15, 2016

Plunging energy prices forced the miner to write down its U.S. oil and gas assets again. The non-cash charge is large but just brings BHP’s balance sheet closer to the outside world’s estimation. A bigger step would be to follow the market’s lead once more and slash the dividend.

Ivan Glasenberg may be mining’s last man standing

December 31, 2015

The Glencore chief outlasted his peers when the commodity boom turned in 2013. The sector may be due another shakeout in 2016 if prices keep falling. But Glasenberg’s big stake in Glencore and his newfound dash of humility mean his copper plating should last another year.

Cash calls leave issuers with unfinished business

December 11, 2015

Lonmin and Standard Chartered’s shares have both slipped further than theory might suggest since issuing a combined $5.5 billion of new stock. That’s logical at miner Lonmin, which now has a big stock overhang. For lender StanChart, it looks like a vote of diminished confidence.

Glencore deserves credit for lessons learned

December 10, 2015

The Swiss miner and commodities trader will cut debt even faster than it vowed in September. Planning for copper prices below current levels is wise. Chief Executive Ivan Glasenberg can’t control China’s demand for metals, but at least his balance sheet now reflects reality.

Anglo American is facing a crisis of confidence

December 8, 2015

Collapsing commodity prices led the coal, copper and diamonds miner to suspend its dividend on Dec. 8. It’s also slashing jobs and investment. Big London-listed miners including Anglo American have lost 47 percent of their market value this year. Yet things could still get worse.