Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Anglo American    AAL   GB00B1XZS820

ANGLO AMERICAN (AAL)
My previous session
Most popular
  Report  
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsOfficial PublicationsSector newsTweets
OFFRE

Glencore shares under cloud after U.S demands Congo documents in probe

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/12/2018 | 05:45pm CEST
FILE PHOTO: The logo commodities trader Glencore is pictured in Baar

LONDON (Reuters) - A U.S. demand for documents related to Glencore assets in Democratic Republic of Congo (DRC) as part of a corruption probe has rattled investors and is likely to weigh on the miner's performance until there is more clarity on the case.

Glencore said it had received a subpoena from the U.S. Department of Justice dated July 2 requesting documents for its Congo business over compliance with the U.S. Foreign Corrupt Practices Act and rules against money laundering.

The Switzerland-based company, which said documents for Venezuela and Nigeria were also requested, provided few details, although it said it would cooperate with the authorities.

News of the subpoena led to the biggest one-day drop in the firm's share price for two years. Glencore is now down about 20 percent so far this year, trading around 314 pence on Thursday.

By comparison, shares in London-listed mining rivals Rio Tinto, Anglo American and BHP are up between 2 and 9 percent.

Glencore declined to comment when asked about the impact on the share price from the subpoena issue.


GRAPHIC - Glencore versus mining peers:

Operations in Venezuela and Nigeria are relatively small, but Congo accounts for 26 percent of Glencore's net present value, the second biggest contributor behind Australia, according to BMO Capital Markets.

NPV is the difference between the present or discounted value of cash inflows and outflows over future years and is used as a measure of the profitability of investment in a project.


GRAPHIC - Glencore NPV: https://reut.rs/2NAkgpW

Congo also contributes $2 billion to Glencore's annual core earnings or EBITDA (earnings before interest, tax, depreciation and amortisation), or about 14 percent.

Jefferies analyst Christopher LaFemina said the United States had a reputation for imposing hefty fines on companies found to have violated its laws in dealings abroad, although he said Glencore had not faced any charges.

"Until this matter is resolved, investors are likely to assume Glencore will have to pay a large fine, and Glencore's cost of capital will increase," he said.

Adding to concerns, Britain's Serious Fraud Office (SFO) is preparing to open a formal investigation into Glencore's activities in Congo, Bloomberg reported in May.

The SFO says it will not comment on the issue. Glencore declined to comment.

"Until some clarity is provided around the potential U.S./UK government investigations, it is difficult to see the company fully recovering from relative underperformance," said Investec analyst Hunter Hillcoat.

After releasing news of the U.S. subpoena, Glencore announced a buyback to bolster its share price, offering a brief bounce. But its shares are now back near their one-year low.

The buyback would still leave Glencore trailing Rio in terms of shareholder returns, according to the BMO estimate. But it would be ahead of Anglo American and BHP.


GRAPHIC - Shareholder returns from miners:

The U.S. investigation could be related to Glencore's settling of a mining row with Israeli billionaire Dan Gertler, who has been under U.S. sanctions since last year, some analysts say. The firm agreed to pay royalties in euros.

"Investors are more sensitive to these things these days," said one institutional investor in Glencore, asking not to be identified. "Some will say maybe this is the start of something and it might get worse before it gets better."

Gertler's Ventora Development Sasu had been seeking $695 million in unpaid and future royalties from Mutanda Mining and $2.28 billion from Kamoto Copper Co (KCC), both subsidiaries of Glencore. The Swiss firm disputes the amounts.

The probes are not expected to lead to production cutbacks, but analysts see risks from Glencore's exposure to Congo.

Glencore mines about a quarter of the world's cobalt, with most of its output coming from Congo. The metal is a key ingredient for batteries that power electric vehicles.

The company plans to ramp up total production of cobalt, mostly from the Katanga and Mutanda mines, to 39,000 tonnes in 2018 and 65,000 tonnes in 2019, the company said in December.

The miner also produced 1.3 million tonnes in copper in 2017, amounting to about 5 percent of world supplies. About 15 percent of Glencore's copper output comes from Congo.


GRAPHIC - Glencore versus world cobalt output:

(Reporting by Zandi Shabalala; Editing by Pratima Desai and Edmund Blair)

By Zandi Shabalala

Stocks mentioned in the article
ChangeLast1st jan.
ANGLO AMERICAN 1.91% 1576 Delayed Quote.1.71%
BHP BILLITON LIMITED 2.92% 32.4 End-of-day quote.6.46%
BHP BILLITON PLC 1.08% 1549.6 Delayed Quote.1.78%
GLENCORE 2.78% 308.7 Delayed Quote.-20.85%
RIO TINTO 0.29% 3615.5 Delayed Quote.-8.28%
RIO TINTO LIMITED 3.06% 75.4 End-of-day quote.-3.50%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on ANGLO AMERICAN
09/13ANGLO AMERICAN : rough diamond sales value for De Beers' seventh sales cycle of ..
AQ
09/11Anglo American's De Beers Group Sold $505 Million in Seventh Diamond Cycle
DJ
09/11ANGLO AMERICAN : De Beers rough diamond sales cycle 7, 2018
PU
09/11ANGLO AMERICAN : rough diamond sales value for De Beers’ seventh sales cyc..
PU
09/07DIVIDEND DECLARATION : Sterling and Euro Rates
PU
08/30ANGLO AMERICAN : Monthly statement on outstanding equity shares and voting right..
CO
08/16ANGLO AMERICAN : Ex-dividend day for interim dividend
FA
08/07ANGLO AMERICAN : completes sale of New Largo thermal coal project in South Afric..
AQ
08/06ANGLO AMERICAN : rough diamond sales value for De Beers' sixth sales cycle of 20..
AQ
08/06China's Cleanup Transforms Iron -- WSJ
DJ
More news
News from SeekingAlpha
09/17Metals, mining shares on watch after reports of new Trump tariffs 
09/14Angola says Anglo American asking for permission explore for metals 
09/06FREEPORT-MCMORAN : Buy The China Induced Weakness 
08/30Nickel Monthly News For The Month Of August 2018 
08/24PLATINUM MINERS' RACE FOR SUPREMACY : And We Have A Clear Winner 
Financials ($)
Sales 2018 27 620 M
EBIT 2018 6 093 M
Net income 2018 3 124 M
Debt 2018 2 801 M
Yield 2018 5,14%
P/E ratio 2018 8,66
P/E ratio 2019 8,93
EV / Sales 2018 1,16x
EV / Sales 2019 1,15x
Capitalization 29 126 M
Chart ANGLO AMERICAN
Duration : Period :
Anglo American Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends ANGLO AMERICAN
Short TermMid-TermLong Term
TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 25,1 $
Spread / Average Target 21%
EPS Revisions
Managers
NameTitle
Mark Cutifani Chief Executive Officer & Executive Director
Stuart John Chambers Chairman
Stephen Thomas Pearce Finance Director & Non-Executive Director
Anthony Martin O'Neill Technical Director & Director
Philip Roy Hampton Senior Independent Non-Executive Director
Sector and Competitors
1st jan.Capitalization (M$)
ANGLO AMERICAN1.71%28 384
BHP BILLITON PLC1.78%114 891
BHP BILLITON LIMITED6.46%114 891
RIO TINTO-8.28%82 789
RIO TINTO LIMITED-3.50%82 789
GRUPO MEXICO S.A. DE C.V.-17.58%21 825