AVZ Discussion 2022

[Frank]

View attachment 81239

 

[Frank]

Mining consolidation to speed up as Chinese demand growth slows​

Joint ventures and asset sales are expected to accelerate in the mining industry, which is ripe for consolidation due to the slowdown in manufacturing and demand growth for industrial metals, particularly in top consumer China.

However, full-scale mergers and acquisitions activity among diversified miners could be hampered for now by prohibitive high costs and significant chances of eventual rejection, investors said ahead of a global gathering of the copper industry for the CESCO event in Santiago, Chile next week.

Reluctance to engage at a company level is seen in LSEG data showing M&A in mining sector fell 27% in value terms to $15 billion in the first quarter compared to the same 2024 period.

Since the start of 2024, BHP’s shares have slumped 26% and Rio Tinto has dropped 23%, while Glencore’s shares have collapsed 42%.

Companies such as BHP and Rio Tinto have robust balance sheets and are delivering handsome returns to shareholders, but they are approaching a period of stalled earnings growth.

With no other country able to pick up the slack left by China and trade wars triggered by US President Donald Trump’s import tariffs, miners are thinking more about creating value and strength through scale.

“We are seeing more discussions about partnering, joint ventures and asset sales,” said George Cheveley, portfolio manager at Investment Manager Ninety One.

Australia-listed BHP also recently formed a joint venture – Vicuña – with Lundin Mining.

Vicuña now owns the Filo copper project in Argentina and the Josemaria project in Chile.

Struggling with declining ore grades BHP is planning to invest $10.8 billion over a period of 10 years in Chile starting with the Escondida operation.

Instead of investing for growth, some have typically opted to boost shareholder returns with dividends and share buybacks.

“Our analysis suggests that valuation multiples are not responding to higher payout ratios and buybacks are no longer delivering strong returns making the pivot to growth more appealing,” said James Whiteside, head of corporate for metals and mining at Wood Mackenzie.

“Diversified companies seeking relevance through big payouts aren’t being rewarded, but the read across from copper miners is, investing in production growth pays.”

Historical precedents​

“Historically, merger discussions often occur either at the very top of the cycle, because mining companies have a lot of money, or at the very bottom of the cycle, because there’s a need to find ways to create value,” said Christel Bories, chairman of French mining group Eramet.

The ball started rolling in April 2023 when London-listed Glencore’s attempt to buy Teck Resources for $23 billion was rejected.

Glencore instead bought Teck’s metallurgical coal portfolio for $7 billion.

But it was when the world’s biggest miner BHP went hostile with a $49 billion bid for Anglo American, the mining world understood a restructuring of the industry was on the horizon.

“It’s important in the mining world for BHP to kick off the M&A cycle because it makes it easier for other CEOs to sell the idea to their boards,” said Liberum analyst Tom Price.

What has made selling the idea of M&A to company boards easier this time are forecasts of rocketing copper demand partly due to power grid replacement and upgrades and e-mobility which includes electric vehicles, scooters and bikes.

mining.com

www.xtrafrica.com

 

[Frank]

Kobold and Rio have been in a partnership since 2023 in Thunder Bay, Canada exploring a prospect for copper, nickel, cobalt and lithium:

https://www.northernontariobusiness...-nickel-cobalt-and-lithium-in-neebing-6848264

So the writer is entitled to presume a partnership is indeed in the air given in the report that US special envoy, Massad Boulos, is meeting in Kinshasa with Felix and business leaders. Further:

One of Massad Boulos’s primary missions will be to facilitate the recovery and resale of a contested lithium project, currently in the sights of mining giant Rio Tinto.

https://english.congovirtuel.com/ko...on-to-broker-a-lithium-mining-deal-in-manono/

 

[Frank]

https://x.com/BSeanie/status/1907836509375385983

https://x.com/sdmoores/status/1907891758488498236

 

[Skar]

lets not play the holier than thou card here, us in the west have massive blood on our hands via our ridiculously corrupt leaders. The only difference is we are more sophisticated in our approach and our bought and paid for mainstream media are more cunning and professional at hiding the fraud and lies of our government

How you see the US or the west is how I see EVERY global leader. My view on war is its all about (poor to regular) people fighting other people to decide where to pay their taxes. Thats why even when nations go to war, commerce still continues through ideologically opposed viewpoints (iphones are made in China and Europe clamours to buy gas/oil from Russia) and even now billionaires stand to lose a lot of money with the new US tariffs but the impact to average joes like you or me probably won't be all that felt (but the news will sensationalise it all like its the apocalypse or the end of world order).

The full potential of Manono is MASSIVE on the lithium market, the full potential of transnational African minerals is many many magnitudes more for the US and thats why I have hope of a good outcome for us.

 

[CHB]

Isn't the best outcome now not to push for a ML for AVZ as that means CATH will get a decent chunk of ownership?

Think we're better off pushing for the North to come back to us, confirming AVZ ownership and guarantees for any future owner to progress development of the mine?

 

[Dazmac66]

Rio share price getting hammered! Any chance we can do a share swap today or Monday as part of the deal? Im very happy for this to move quite quickly.

 

[Stockinvesting]

My thoughts (FWIW)....
ML around 10/4...... then on sell

 

[Azzler]

Isn't the best outcome now not to push for a ML for AVZ as that means CATH will get a decent chunk of ownership?

Think we're better off pushing for the North to come back to us, confirming AVZ ownership and guarantees for any future owner to progress development of the mine?

Not an issue, the DRC need only tell CATH they can not have ownership in Manono, which will void the agreement.

 

[CHB]

Not an issue, the DRC need only tell CATH they can not have ownership in Manono, which will void the agreement.

Hopefully that's the case... Cause the figures banded around whilst nice, isn't too exciting

 

[Skar]

Not an issue, the DRC need only tell CATH they can not have ownership in Manono, which will void the agreement.

Sure they can tell Zijin that too then before the ICC/ICSD does.

 

[LEFOOL]

https://x.com/AugustCohen4/status/1907835261351776629

View attachment 81289
View attachment 81290

That's bloody promising tbh but i'm more impressed with Massad's perfect French... old school Lebanese aye, his French is better than old mate Felix haha

 

[hedrox]

Trump Administration Backs African Lobito Rail Plan, Envoy Says

The US said it remains committed to the Lobito Corridor project that links critical minerals deposits in central Africa to an Atlantic port, signaling a bright spot…

financialpost.com

 

[hedrox]

 

[Remark]

 

[Scoota30]

Been quiet of late @geo_au ?

 

[hedrox]

High Voltage: Lithium's price recovery could shock you - Stockhead

Lithium surpluses could erode quicker than you think, leading to potential price shocks in the next two years.

stockhead.com.au

 

[Pokok]

Been quiet of late @geo_au ?

Don't worry mate he is watching and reading

 

[Frank]

Let's go, let's go!

Interesting comment about toning things down on X, hmm

https://x.com/Outcast_North/status/1908010943398707404

RIP John

https://x.com/TDrywallact/status/1908015272096883103

 

[Mute22]

Alright, folks, this is probably a good time to remind everyone to keep your OPSEC tight. I’m not a big enough holder to be getting winks or steak dinners, but if you hear anything from management, your industry, or anywhere else - no, you bloody didn’t.

If it helps, picture yourself working on the Manhattan Project. Loose lips sink ships, and we’re at a critical stage where we need all opposing parties second-guessing themselves, assuming everyone else is making moves.

This is a great place to have a bit of banter, but let’s not forget, these channels are definitely being watched by paid FUD agents and criminals, not just to gather intel but to sow doubt and confusion. Stay sharp.