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.

Glencore Rio takeover would be harder than Xstrata

October 7, 2014

Ivan Glasenberg’s miner-trader is stalking $90 billion iron giant Rio Tinto. Though there’s some logic to a deal, Glencore will be loath to pay much of a premium, and the clash of cultures would be extreme. Rio is also in a better position to resist than rival Xstrata in 2012.

Rio Tinto can dig in against Glencore

October 7, 2014

The miner’s shares leapt after it admitted rebuffing the commodity trading giant. Yet the timing is opportunistic, as iron ore slumps, and a $160 bln merger looks suspiciously like a takeover on the cheap. So Rio’s board can justifiably demand a big premium, or no deal.

Rio Tinto takes bold step into Aluminum rehab

October 17, 2011

Rio Tinto has taken a bold step into aluminum rehab. The mining giant plans to sell off roughly a third of its business in the metal, most of which was acquired in a disastrously expensive merger with Canada's Alcan in July 2007.

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.

Rio’s snap succession makes bad news look worse

January 17, 2013

The miner’s investors were expecting a big writedown, although maybe not $14 bln, including $3 bln on a 2011 African coal deal. But even though the new CEO, Rio iron ore chief Sam Walsh, is experienced and capable, the decision to replace Tom Albanese immediately looks rushed.

China’s role in Rio Tinto chief’s downfall

January 18, 2013

Tom Albanese’s $38 bln Alcan deal was a bet China would use more aluminium and close down its unprofitable producers. Instead, it has propped them up, helping push prices down and the CEO out of his job. It’s a reminder that China’s state capitalism plays by different rules.

Intel and Rio pull markets in opposite directions

By Edward Hadas
July 14, 2010

It's the beginning of a strong economic recovery. Just ask the folks at Intel. The chip producer is smiling because companies "have some breathing room in the economy and their budgets", as chief executive Paul Otellini put it on Tuesday. Or maybe it's the end of a weak recovery. Tom Albanese, the boss of miner Rio Tinto, subsequently noted "fears about a possible double-dip recession in OECD countries and a slight slowdown in Chinese growth".