Glencore announces $1 billion share buyback
The miner, which will hold 16.4% of the enlarged company and $900 million in cash, considers NYSE-listed Bunge shares as surplus capital.
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Reuters
2 hours ago
- Reuters
Philippine annual inflation at 1.4% in June
MANILA, July 4 (Reuters) - Philippine annual inflation slightly quickened to 1.4% in June, compared to the previous month's 1.3% print, the statistics agency said on Friday, due to the faster pace of increases in utility costs. Economists in a Reuters poll had expected annual inflation of 1.5 % last month, within the central bank's forecast range of 1.1 to 1.9%. Core inflation, which strips out volatile food and energy prices, was unchanged at 2.2% in June. Inflation in the first half of the year averaged 1.8%, within the central bank's 2% to 4% target for the year.
Reuters
3 hours ago
- Reuters
Metals smelting is the West's next critical minerals crisis
LONDON, July 3 (Reuters) - Global supply chains are already reeling from the impact of China's rare earth export controls, but an even bigger critical minerals threat is looming. Western metal smelters are in crisis. China's rapid expansion of processing capacity is crushing margins across the metallic spectrum. Copper smelters in Namibia and the Philippines have recently been placed into care and maintenance after processing fees turned negative. More are at risk. Glencore (GLEN.L), opens new tab has warned that its Mount Isa copper smelter in Australia is financially unviable after related mining activity stops this month. The Australian government is also facing urgent calls for help to save Nyrstar's zinc and lead smelters and Rio Tinto's (RIO.L), opens new tab Tomago aluminium smelter. China's share of global base metals smelting has been steadily increasing, and the country is approaching the same level of dominance that has allowed it to weaponise exports of more esoteric critical minerals such as tungsten and bismuth. Chinese smelters have just agreed a mid-year copper concentrates supply deal with Chilean miner Antofagasta (ANTO.L), opens new tab which prices their conversion fee at precisely zero. At least it wasn't negative, unlike the spot market, where copper smelters have actually been paying miners for raw material. This is a total inversion of historical pricing. Copper smelters can make money from by-products such as gold, silver and sulphuric acid, but smelting and refining charges are the core revenue stream. Or at least they should be. Zinc smelter charges also turned negative in the fourth quarter of last year. Spot fees have since recovered to $55 per metric ton, still short of this year's benchmark of $80, which was itself the lowest annual charge in at least 50 years. Yet zinc mine production is booming, up 5.1% year-on-year in January-April, and so are China's imports of zinc concentrates. Arrivals more than doubled to over 2.2 million tons in the first five months of 2025. The problem is not simply one of constrained mine supply. Low fees in both zinc and copper markets also reflect a super-charged expansion of Chinese smelting capacity over and beyond what the world's mines can feasibly supply. The result has been an implosion in treatment charges and in smelter profitability. China's share of global refined zinc production rose from 33% in 2007 to almost 50% in 2024, according to the World Bureau of Metal Statistics. The country also produces around 60% of the world's primary aluminium output after years of breakneck expansion in the smelting sector. Excess aluminium production leaks out in the form of semi-manufactured products. Exports have grown from two million tons in 2010 to six million tons last year. The pace of growth has been too much even for the Chinese authorities, which have mandated a capacity cap of 45 million tons per year. That's cold comfort for Western aluminium producers, though, since Chinese operators are simply constructing more capacity in Indonesia. Indonesia now also accounts for around half of global nickel production thanks to a Chinese investment boom in both mine and processing capacity. The Sino-Indonesian supply surge has crushed the nickel price and forced over half a million tons of Western capacity to close since 2020, according to Macquarie Bank, which warns that there is now overcapacity at every stage of the processing chain. China's already strong hold on global supplies of industrial metals is only going to get tighter as more Western smelters succumb to the margin squeeze. China's own smelters are also feeling the margin pressure but many of the biggest players are vertically integrated, meaning losses at the processing stage can be offset further down the production chain. In addition, loss-making plants are given a helping hand by both central and provincial governments, a level of state subsidy that tilts the playing field against Western competitors. Western counterparts are also paying more for their power, a major cost for all smelters and particularly for aluminium plants which produce the light metal through electrolysis. It doesn't help that both existing operators and potential new plants must compete with the equally power-hungry tech sector for electricity. The European Union, which has seen multiple aluminium and zinc plants close since energy prices spiked after Russia's invasion of Ukraine in 2022, is prioritising faster grid access for energy-intensive sectors and promoting power purchase agreements as a way of alleviating costs. Whether the EU's "Action Plan" for its aluminium and steel processing capacity works remains to be seen. But it is a sign that Western policymakers have understood the lesson from China's recent flexing of its critical minerals muscles. China doesn't dominate global mining but rather the intermediate stage of the processing chain which converts ore into metal. The control is almost total in the case of exotic metals such as rare earth elements, and there is a growing threat of similar dominance in much larger base metal supply chains. Western smelters are strategic assets, not just for their key role in connecting the supply chain from mine to product, but also because of their by-product potential. China's export controls have spooked the gallium market, but the semiconductor metal can be recovered from the aluminium smelting process. Rio Tinto's Kennecott copper smelter in Utah is now also producing tellurium, another "hot" critical metal. Nyrstar could produce antimony, also subject to Chinese export controls, at its Port Pirie smelter in Australia, but only if the plant can continue operating. Its future now rests with the Australian government, which along with other Western governments must decide just how much it's prepared to pay to insulate its smelters from the Chinese price crush. The opinions expressed here are those of the author, a columnist for Reuters.
Reuters
5 hours ago
- Reuters
Bunge completes long-delayed mega-merger with grain handler Viterra
CHICAGO, July 2 (Reuters) - Global agribusiness Bunge Global (BG.N), opens new tab said it officially closed a long-delayed deal to merge with Glencore-backed (GLEN.L), opens new tab Viterra on Wednesday, two years after announcing the $34 billion mega-deal. The merger creates a global crop trading and processing giant that is poised to rival agribusiness giants Archer-Daniels-Midland (ADM.N), opens new tab and Cargill, at a time when slumping grain prices, weak crop-processing margins and geopolitical tensions have eroded profitability in the sector. Bunge shares closed 1.4% higher on Wednesday. The deal culminates a dramatic turnaround for Missouri-based Bunge. Just seven years ago, the two-century-old company struggled through a particularly weak stretch of earnings results that left it vulnerable to takeover attempts by rivals Glencore and ADM. Investor pressure forced out Bunge's CEO Soren Schroder in late 2018, before Greg Heckman was appointed to lead the company in April 2019. Last month, China's market regulator granted conditional approval for the merger, which cleared the final hurdle for the deal. Heckman will remain CEO of the combined company, and Bunge Chief Financial Officer John Neppl will also keep his role, Bunge said on Wednesday. Viterra CEO David Mattiske and Julio Garros, Bunge's co-president of agribusiness, will be co-chief operating officers. The merger with Netherlands-based Viterra enhances Bunge's grain exporting and oilseed processing businesses in the United States, where it has a smaller presence than its larger rivals ADM and Cargill, according to analysts. The deal also expands Bunge's export capacity and physical grain storage and handling footprint in major global wheat suppliers Canada and Australia.
