Research archive for AGL

What exactly is up with Anglo American and their recent announcement? And what everyone thinks about it? We wrote about it last Thursday, in case you missed it -> Anglo American, have they stymied Codelco? We heard the news yesterday and you can read on the Telegraph website old boy -> Codelco files injunction to prevent Anglo American Chile deal. The only "thing" that I like about all of this is that the Chilean court will decide this immediately and the outcome is expected this week. I guess we have to trust that the courts will have to decide what is the best way forward, I would have thought that the government of the country that you are mining in would be the last people that you want to upset or have a fight with. Well, Anglo have to act in the best interests of their shareholders too.

How are Anglo American going to pay for the De Beers stake? Remember last week when Cynthia Carroll said that the deal would be self funded? Well, this is how it is going to be self funded, according to Bloomberg -> Anglo Sells $5.39B Chilean Stake to Mitsubishi. Huh? 24.5 percent for 5.39 billion Dollars is a lot more than what Codelco thinks that it is worth, remember just four weeks ago this announcement -> Anglo American could be a forced seller of their premier copper asset. Codelco reckon that 49 percent is worth 9.76 billion Dollars, valuing the Anglo copper assets at 19.91 billion, Mitsubishi price for that stake values the asset at 22 billion Dollars. Well, that is the way that I understand it, Mitsubishi have paid over ten percent more than Codelco's formula.

The real big South African (?) news today is the sale of the Oppenheimer stake in De Beers to Anglo American. Like the dudes said next door, didn't they just unbundle that? That was over a decade ago, for a market that has a three week memory (and does not remember the last nonfarm payrolls number), this is almost new news. Download the full presentation here from the Anglo website -> UNIQUE OPPORTUNITY TO CONSOLIDATE THE WORLD'S LEADING DIAMOND COMPANY.

Let us take a quick look at the Anglo American production report from last week, this is for their third quarter to end September 2011. You can have a full read through of the report by following the following link -> Production Report for the third quarter ended 30 September 2011.

OK, here is an announcement out from Anglo American last evening on the alerting service, our good old friend Gareth also pointed us in this direction. It is to do with a South American copper asset or more specifically with Anglo American Sur, which is the divisions of the parent company that owns the El Soldado and Los Bronces copper mines. OK, now you are interested. It turns out that when Anglo American bought these assets back in 2002 (good times boys, what-what) there was an option included where Enami, a Chilean State owned mining company could purchase back 49 percent of the assets. I am presuming exercisable by a specific date. Enami then ceded their option at the end of 2008 to none other than Codelco (Corporacion Nacional del Cobre de Chile), the Chilean state owned copper mining company.

Two short bits about Anglo American here quickly, first the Australian news, no thanks, there is going to be no counterbid involving them on Macarthur Coal. Now their (Anglo's) partner in the counter bid, was the Citic Group, who already own nearly a quarter of Macarthur coal. So, unless Citic come back with something more compelling that the Peabody 16 Aussie Dollar a share offer, it will be all Peabody's. I am sure that the Macarthur board want Citic on their own to come back with something, they (Macarthur board) want to see a higher price. But not to be too greedy, and both parties walking away.

Anglo American are reported to be lining up a counter bid for Macarthur coal, in a land down under. From London. The first suitor that the Macarthur coal board have already rejected comes from US based coal company Peabody Energy, and the well known ArcelorMittal, the global group. 15.50 Aussie Dollars was the first bid price, the Macarthur board said 18 Aussie was a fairer reflection of what they think would be good value for shareholders. Macarthur coal closed 2.32 percent higher this morning in Sydney at 15.68 Aussie.

It is Anglo American day today, we have seen all the subsidiary companies report so far and now it is the time of the parent company to report the bits that we have not seen already. Half year results this morning, company with operations around the world, started here, primary listing in London and report in Dollars. Yeah, main reason for that is that the UK is friendly for companies and they want to be there, plus the investors there understand mining. And then of course they have to report in Dollars for the main reason that their products are all sold in Dollars.

One of the other "Anglo companies" (sort of) reported results this morning, check out: De Beers Interim Results. Let me do a copy paste of the table in the .pdf release titled INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2011.

Anglo American, I came across something quite interesting from them, no doubt continually swinging stuff governments way. Or at least those calling for mine nationalisation. Check it out: Financial contribution to South Africa.

Two bits of news about the old darling Anglo American yesterday, one good, one not too bad, but better as a whole for the industry. The first one is that the production targets at Collahuasi copper mine in Northern Chile will NOT be met this year. Anglo have a 44 percent stake in the mine, Xstrata have 44 (remember the merger of equals) and Mitsui have the balance.

I listened into the Anglo American conference call on Friday from the comfort of my desk, I didn't have to run to wherever for free sausage rolls (filled with soya for me) and then knock off early. I can't quite understand why people have to go along, but do accept that without them (the attendees) there would be no cameras. But, for someone like me, this is a clean way for analysing the results. Check out these resources and tell me if I am wrong or right ---> Investor presentation - PRELIMINARY RESULTS - YEAR ENDED 31 DECEMBER 2010. And the Video interview (transcript) with Chief Executive Cynthia Carroll, and Finance Director Rene Medori.

b>Anglo American reported their full year numbers to December this morning. We have of course seen all the moving parts, Kumba Iron Ore, De Beers and then the "big one" (although that is not fair to Kumba) Anglo Platinum. So, we have had a few entrees and this is time for the main course. Without further ado, here goes: Group revenue 32.929 billion Dollars, underlying earnings at 5 billion USD. That translates to underlying earnings per share of 4.13 USD per share, 93 percent higher. So, in ZAR at the current rate (which is close to the average rate achieved for the year) is about 29 and a half Rand per share.

Anglo American had their last visible (although not really anymore) big division report Friday. And I am talking about De Beers. The contribution by De Beers to Anglo American earnings is 302 million Dollars. Or 2.189 billion Rands, more or less. Expect Anglo American results on Friday, the best thing about these results is that three biggies have been made public already, Anglo Platinum, Kumba Iron Ore and of course now De Beers. The three other "big issues" will be a) Their coal division (thermal and metallurgical) must have been cooking (coking – hah-hah), b) How they are progressing in Brazil with that massive Iron ore project (to production around late 2013 it will cost +30 billion ZAR by my guesstimates) and c) How much did copper contribute at these elevated price levels.

Jozi, Jozi. Rain some more. It feels like we can associate with the fellows over in Queensland from the rain point of view, the topography however is very different. Queensland looks flat. As a consequence coal prices are expected to rise sharply, the mining majors have big coking coal operations in Queensland. In fact, I know personally an Anglo fellow who might be heading that way (Queensland) to work for the same company on coal projects.