197 (10.06.18)


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Briefing

Good Week for BHP, which had so many first-round bids for its US oil business, it may take until 2019 to evaluate all the offers. Once a drain on BHP's cash levels, the division is now expected to fetch up to $13bn

Bad Week for platinum; 40 per cent is used in car exhausts, but politicians are driving diesel vehicles off the road and platinum is now trading at a near-record $387 discount to gold, having halved in ten years to $913 per ounce

Paulson Ups Pressure

New York-based investor John Paulson, the man who bet against the US subprime market when it imploded in 2008, has a new point of attack: gold mining stocks.
    Paulson's hedge fund, which runs $9bn, has launched a consortium of investors, the Shareholders Gold Council (SGC), which wants to boost the industry's returns by piling pressure on gold mining boards.
    Some of mining's largest funds, including Tocqueville and Livermore Partners, have already signed-up, whilst Blackrock and Van Eck, two of the world's largest gold investors, are also discussing the idea, according to Reuters.
    SGC plans to bombard the industry with research, highlighting its woeful performance and high pay, whilst advising investors on how to vote on key issues.
    Input costs have moved in the industry's favour and production has gone up, yet Canadian gold stocks have lost 40 per cent of their value in ten years, versus a 46 per cent rise in the gold price. They have also written off $85bn since 2010, with industry-leader Barrick accounting for over $25bn of the losses.
    Partners acting for Paulson, 62, have previously singled out Kinross Gold and Eldorado for “chronic, poor M&A”, saying gold stocks are digging themselves into a hole of “irrelevance and oblivion.”

Ivan Off to Congolese Clink

Glencore's CEO Ivan Glasenberg has been summoned to appear in court in Kinshasa over claims the Swiss trading group used “violence and threats” to coerce a stake in the world's largest cobalt mine off Charles Brown, an American-Congolese businessman. The hearing is on July 2nd.
    Brown, who has a prison sentence to his name, has previously had the claim thrown out, but wants roughly $1bn in damages for his former interest of 19 per cent. Glencore is also being sued in the country for nearly $3bn by sanctioned Israeli diamond dealer Dan Gertler, who says he is owed the money in unpaid royalties. “When it rains in Congo, it really pours,” analyst Elisabeth Caesens told Bloomberg.

Rio Tinto: Robotic

Rio Tinto's driverless trains and automated trucks in Western Australia may boost tonnage, decrease wear-and-tear and improve safety. But they come at a human cost. 600 jobs at the group are at risk, according to an internal memo leaked by The Australian this week, as Rio ups its number of driverless trucks from 77 last year to 325 by 2021, equal to nearly half its global fleet. A spokesman for Rio Tinto played down the report, saying the numbers were indicative.

 

CONTENTS

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Underground in Africa, at Glencore's largest copper mines, high-tech ideals come up against a harsh, unnatural environment

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