In the M&A hall of shame, Rio Tinto’s top-of-the-market $37bn acquisition of Alcan (in CASH) is right up there. In this century, at least.
It was a truly disastrous deal that nearly killed the Anglo-Australian mining company and its after-effects are being felt to this day. Just ask Tom Albanese. Read more
The new Rio boss has a few nice words about his predecessor, followed by a flash of steel, in a letter to staff. And it’s about all you’re likely to hear from Walsh until annual results on Valentines Day. Read it after the jump: Read more
A final word on Thursday’s defenestration of Rio boss Tom Albanense (via JP Morgan).
As low cost producers, with arguably the best resources in the world, it’s little wonder that BHP Billiton and Rio Tinto are shipping as much iron ore as they possible can from their mines in the desolate Pilbara region of Western Australia. Assuming a $7/tonne freight rate, Lex estimates, the landed iron ore price in China would have to fall to $37/t before Rio lost out.
So even with the iron price at a near three-year low of $112 , Rio and to a lesser extent BHP are making a killing and will continue to do so as higher cost producers (mainly Chinese) fall by the way side. Read more
– By Neil Collins –
Dear Lloyds: nobody wants to buy your bank Read more
It was only a couple of months ago that Vale was talking up iron ore prices out to 2015 and beyond, and analysts were saying the discount being applied to company shares on expectations of a glut were too steep.
Moreover, Marius Kloppers and Tom Albanese were both cautioning that building up the planned new capacity that might take longer than expected. Read more
Rio Tinto, one of the world’s largest natural resources companies, has warned that some of its customers were asking to delay shipments of metals, the FT reports. The warning represents a marked shift in industry sentiment from only six weeks ago, when most miners, commodities traders and oil groups painted a bullish outlook for commodities demand and prices despite falling equity markets. “It is noticeable that markets are somewhat weaker,” said Rio Tinto chief executive Tom Albanese in an interview. “In a few cases, customers are asking to reschedule deliveries. “This is consistent with customers being cautious about the current state of business.” Read more
And in case you missed the news, Read more