Kevin's Feed
Oct 26, 2012
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Cynthia Carroll’s departure won’t fix Anglo

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Cynthia Carroll is riding into the sunset. Anglo American and its chief executive are parting ways. Missteps early in her tenure hurt Carroll, but she did deliver needed cultural change. A new broom is unlikely to have an easier time. Anglo’s biggest problems are largely beyond the control of management.

Oct 24, 2012
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Rosneft buy may leave Russian oil industry wanting

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Rosneft will become the world’s biggest listed crude producer following its $55 billion swoop on Russia’s third-biggest oil company. Igor Sechin’s new behemoth also expects to generate $3 billion to $5 billion of cost synergies from scooping up its smaller rival. If Rosneft can apply TNK-BP’s oilfield know-how to improve production at its own fields, the cost and revenue benefits of the Russian oil shake-up could indeed climb high.

Oct 11, 2012
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Bumi should grit teeth and engage with Bakries

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

No one trying to maximize shareholder value at Bumi Plc would want to start from here. Financier Nat Rothschild’s bid to create an emerging markets coal champion has been a disaster, thanks to clashes with the group’s backers in Indonesia. Now the country’s powerful Bakrie family says it is willing to exit the venture in return for a stake in coal assets they sold to Bumi last year. It’s fiddly and humiliating, but it’s probably a good deal for Bumi Plc’s shareholders.

Oct 4, 2012
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No easy fix for South Africa platinum crisis

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Platinum looks like a commodity from hell, and not just because it is dug from especially deep mines. The economics and the politics point to a long crisis.

Sep 19, 2012
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South Africa platinum crisis not over yet

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

South Africa’s platinum crisis isn’t over yet. A pay deal struck by Lonmin will, if it holds, end a violent six-week strike that has claimed 45 lives. That’s good for the workforce. And it solves an immediate, potentially existential problem for the world’s third-biggest platinum producer. But it sets up other big challenges for Lonmin and the industry. The big wage hike will hurt already weak margins. And the response may only encourage further strikes.

Sep 10, 2012
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Xstrata should accept revised Glencore pitch

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Xstrata should accept Glencore’s revised $35.5 billion offer for the mining giant. What was originally billed as a merger of equals is now, for all practical purposes, a takeover at a modest premium. Changes to the proposed governance arrangements make the business combination look riskier than before. Glencore may have to pay up to convince Xstrata’s top people to take orders from its boss, Ivan Glasenberg, after his Xstrata counterpart Mick Davis leaves. But for all the recent animosity, this is a recommendable proposal.

Sep 7, 2012
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Glenstrata drama is no way to do M&A

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Memo to Ivan Glasenberg: this is not the way to do big public company M&A. The boss of Glencore has lobbed a last-minute curveball to save the commodity trader’s proposed merger with miner Xstrata, seeking more time to discuss sweetened terms. The clumsiness of the move creates the impression that Glasenberg can’t suppress his trader instincts when he needs to play the statesman CEO. It also augers ill for any transaction that follows.

Sep 6, 2012
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BP’s path to Macondo settlement just got harder

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Macondo is back. After March’s $7.8 billion settlement with Gulf Coast fishermen and other private plaintiffs, a deal with the U.S. government over civil and potential criminal liability for the 2010 Gulf of Mexico disaster seemed to be in reach for BP. It probably still is – the two sides are still in talks ahead of a civil trial in January. But sharp rhetoric in new filings by U.S. government lawyers is a reminder that the UK oil major faces a tough path to securing a favourable outcome. The market’s reaction – wiping $5 billion off BP’s market value – looks appropriate.

Aug 6, 2012
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‘Peak’ resource nationalism could get messy

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Miners see a silver lining in the fading super-cycle: it lets them be pickier about working with grabby governments. Yet while that may be true when it comes to new investments, existing mines will remain vulnerable to profit-skimming, or worse. Populist pandering doesn’t necessarily wax and wane in lock-step with commodity prices. And if governments continue to pursue a bigger share of the resource pie, it will only aggravate downward pressure on miners’ returns.

Aug 3, 2012
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Shale writedown tarnishes BHP’s street cred

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Marius Kloppers is right to take his lumps. The BHP Billiton chief executive has waived his 2012 bonus after the mining giant took a $2.8 billion writedown on some of its U.S. shale gas acreage. The hit looks small when compared with BHP’s $170 billion market cap, and wasn’t unexpected. But BHP paid almost $5 billion for the asset just 18 months ago. That’s embarrassing for a company that trades on its reputation as a canny operator.