Rio Tinto scraps plans for sale or IPO of Canadian iron-ore unit By Rhiannon Hoyle Published: Sept 30, 2019 2:44 a.m. ET Reuters Rio Tinto PLC has scrubbed plans for a sale or initial public offering of its Canadian iron-ore unit, following a yearslong effort to unload the business, according to a person familiar with the matter. Rio Tinto RIO, +1.09% RIO, -0.55% RIO, +1.17% has been shopping around its 59% stake in Iron Ore Co. of Canada on-and-off since 2013, but hasn’t been able to find an agreeable price with potential suitors as iron-ore prices have waxed and waned. Global miners including Rio Tinto have spent several years selling or spinning off assets in a bid to reduce debt and lift shareholder returns by focusing on only their most profitable or promising operations. Iron-ore prices this year surged to their highest value since early 2014 on concerns over a shortfall, but have since eased and are widely forecast to edge lower over the coming year. Executives at Rio Tinto, which in Australia runs one of the world’s biggest iron-ore operations globally, had previously said they were under no pressure to offload the Canadian business. “I want to clean up the portfolio as quickly as I can but, at the same time, there will not be a fire sale,” Chief Executive Jean-Sebastien Jacques had said in 2017 of his strategy to sell assets. The decision to tell bankers to stop working on the process for a sale or IPO for the Canadian unit was earlier reported by Bloomberg. Iron Ore Co. of Canada produces iron-ore concentrate and pellets from mining operations and processing facilities in Newfoundland and Labrador. It also runs port facilities in Quebec. The business is a joint venture between Rio Tinto, Mitsubishi Corp. 8058, -0.82% , which owns 26%, and the Labrador Iron Ore Royalty Income Corp. LIF, -3.34% , which owns 15%. It recorded net earnings of $166 million for Rio Tinto in 2018, down from $235 million the year earlier. Its operations had been suspended for two months during the year amid labor negotiations. https://www.marketwatch.com/story/r...iron-ore-unit-2019-09-30?mod=mw_theo_homepage
Exclusive China starts new $10b Oakajee iron ore push Peter KerResources reporter Oct 21, 2019 — 12.00am A Chinese state-owned entity will seek to revive a $9.7 billion mining rail and port project in Western Australia, in a move that could unlock the nation's next iron ore export province. Sinosteel has acquired Japanese giant Mitsubishi's interests in the long-stalled Oakajee Port and Rail project, in a deal that comes in the strongest year for iron ore prices since 2014. The acquisition effectively resolves a dispute over port tariffs that was the major wrecker of attempts to develop Oakajee during the heady peaks of the iron ore boom in 2011, and when combined with Sinosteel's existing assets nearby, make the Chinese company the dominant force in the mid-west region of WA. Attempts to develop Oakajee and unlock an iron ore province to rival the Pilbara region have been under way for 46 years, but it rose to national prominence around 2011 after becoming a pet project of Colin Barnett's Liberal state government. Sinosteel's $2 billion Weld Range iron ore project was set to be a major customer of Oakajee, but cost blowouts on the port and rail forced up the proposed port tariffs, prompting Sinosteel to halt work on Weld Range in June 2011. According to internal emails leaked from Sinosteel in 2011, the Chinese company believed that port tariffs proposed by Oakajee Port and Rail Pty Ltd would have rendered the Weld Range project "economically unviable''. Mitsubishi loomed as the project's saviour when it paid $325 million for the 50 per cent of Oakajee that it did not already own in November 2011. But iron ore prices had begun their long retreat by that time, and the confluence of factors meant Oakajee was never built. Last week's deal means Sinosteel will control both the port tariffs and the Weld Range mine, not to mention other iron ore assets in the region, if Oakajee's port and rail assets are ever built. Peppercorn price Sinosteel confirmed the acquisition when approached by The Australian Financial Review, but has not stated any current plans to construct the deep-water port at Oakajee, nor the 570-kilometre network of railways that were going to connect it to the iron ore mines. The Australian Financial Review revealed in July 2018 that Mitsubishi was close to selling the assets, and documents filed with the Australian Securities and Investments Commission last week show that two Sinosteel subsidiaries are the buyers. The documents suggest two Sinosteel subsidiaries paid the peppercorn price of $3 each for their respective 50 per cent stakes in Oakajee Port and Rail, the company that owns the studies and intellectual property for the Oakajee railway network and deep-water port. One of the Sinosteel subsidiaries was also transferred all shares in Crosslands Resources, the company that had tenure over the nearby $3.7 billion Jack Hills iron ore project. Crosslands is reliant on Oakajee Port and Rail building $6 billion worth of port and rail infrastructure to get its product to market. ASIC documents say Crosslands was sold for $0. It is understood the transaction has been through a lengthy process with the Australian government's Foreign Investment Review Board. Chinese state-owned companies controlling port infrastructure in Western Australia were the target of negative and nationalistic advertising campaigns by Clive Palmer's United Australia Party during this year's federal election campaign, while Chinese company Landbridge's 99-year lease on the Port of Darwin has also raised controversy. Aside from Weld Range, Sinosteel owns the Blue Hills iron ore mine in the mid-west, which operated for two years before being shuttered in May 2015. While some high-grade iron ore exists in the mid-west, much of the resources in the region have iron content below the 62 per cent level that has became the industry benchmark. A significant amount of iron ore in the mid-west is lower grade magnetite, which requires expensive processing to be turned into a saleable concentrate with iron grades of between 65 per cent and 70 per cent. The energy intensive processing stage has made magnetite concentrate largely unviable in WA over the past decade, but there are signs that might be changing, particularly given the trend for Chinese steel mills to seek higher grade, higher quality raw materials. Fortescue committed $US1.84 billion in April toward the Iron Bridge magnetite joint venture with China's Baowu and Taiwan's Formosa, which will build a $US2.6 billion magnetite concentrate project in WA's Pilbara region. Iron Bridge's concentrate will have iron grades of 67 per cent, and Fortescue expects to be shipping the first concentrate from Iron Bridge before June 30, 2022. Asked earlier this month why she believed Fortescue could profitably make magnetite concentrate in WA given rivals like Ansteel and Citic had struggled to be profitable for much of the past decade, Fortescue boss Elizabeth Gaines said Iron Bridge would be ''far more energy efficient'' than its predecessors. ''We have applied different innovation to magnetite processing and we have been able to prove it by spending $500 million on a full-scale pilot and demonstration plant,'' she said on October 10 on the sidelines of the Melbourne Mining Club. "I think the other projects that were developed, I don't have their specifics, but they didn't go down the path of doing a stage one, full-scale pilot plant and demonstration plant. "We have actually proven the technology, we know it is more energy efficient and we have applied some innovation to the processing and so we have a high degree of confidence that it will be successful and profitable." Ms Gaines said Fortescue had not finalised its plans for how Iron Bridge's energy needs would be met. ''It is less about the source of generation. It is the absolute amount of energy, it is a 220-megawatt energy requirement. That compares to a similar project in Western Australia which is 450 megawatts, so that is the energy efficiency," she said. Once fully ramped up, Iron Bridge is expected to produce 22 million wet tonnes of iron ore a year, which is the equivalent of about 20 million tonnes of conventional iron ore exports. Sinosteel has not floated any magnetite concentrate plans for Oakajee, and in the immediate future the company is expected to focus on its existing iron ore mines in the region, which are conventional "direct shipping ore" mines extracting hematite iron ore. https://www.afr.com/companies/mining/china-starts-new-10b-oakajee-iron-ore-push-20191018-p5324s
https://www.afr.com/markets/commodi...ess-severe-winter-steel-curbs-20191026-p534ff China gobbles up iron ore amid less severe winter steel curbs Clyde Russell Oct 26, 2019 — 6.45am London | China's imports of iron ore show no sign of slowing in October, and may even come close to a record high, indicating that concerns over lower steel output over winter may be misplaced. Vessel-tracking and port data compiled by Refinitiv show that imports of the ore used to make steel are on track to exceed 100 million tonnes in October. The data is filtered to show only cargoes already discharged, or in the process of discharging, or underway and expected to unload this month. Winter pollution curbs in China may not be as severe as previous years, allowing mills to continue operating at relatively high rates. Bloomberg If iron ore imports do exceed 100 million tonnes, it would mark only the third time this has occurred, after September 2017 and January 2018. Imports for September were 99.4 million tonnes, a 20-month high, official customs data showed. The vessel-tracking and official figures don't align exactly, given differences in when cargoes are assessed as having been offloaded and cleared customs. The recent trend in China's iron ore imports has been of strong gains, partly making up for the loss of supply earlier this year in the wake of a fatal dam collapse in Brazil and a cyclone in Australia, which combined to crimp shipments from the world's two biggest exporters. However, the ongoing appetite for iron ore also seems somewhat at odds with the drop in steel output in September to the lowest in six months. Steel production was 82.77 million tonnes last month, down 5.4 per cent from 87.25 million tonnes in August, the lowest level since March, data from the National Bureau of Statistics showed. But there are reasons that September was more likely an outlier for steel, given production curbs ahead of the week-long national day holidays in early October. For the first nine months of the year, China churned out 747.82 million tonnes of steel, up 8.4 per cent from the same period last year, the official data showed. While steel mills have seen their profit margins compress this year, demand appears to be holding up, especially in housing construction. This means steel mills still have the incentive to produce and are likely to be keen to ensure that iron ore inventories are sufficient. The winter pollution curbs in China may also not be severe, allowing mills to continue operating at relatively high rates. In an action plan for October 2019 to March 2020, China said 28 smog-prone northern cities, including the capital Beijing, would have to curb emissions of lung-damaging small particles known as PM2.5 by an average of 4 per cent from a year ago. However, the targeted decrease is 1.5 percentage points lower than an earlier draft, and would not be enough to reverse a 6.5 per cent surge throughout the Beijing-Tianjin-Hebei region over the same period last year. This means that the winter pollution curbs in some of China's major steel-producing regions may not result in much production being cut, an expectation that is reflected in robust iron ore imports, and in the pricing of the raw material. In recent months high-grade iron ore has moved closer in price to the benchmark 62 per cent grade, a signal that steel mills are unwilling to pay a premium for better quality ore. This generally means the mills are seeking to lower costs by using lower quality iron ore and are therefore less concerned about possible pollution curbs. Benchmark 62 per cent iron ore, as assessed by commodity price reporting agency Argus, ended at $US86.75 a tonne on Thursday, a discount of 7.2 per cent to the 65 per cent grade, which is less than half of the 16 per cent discount that prevailed at the start of the year. Overall, the picture that emerges is one of steel mills seeking to minimise costs as margins weaken, but still run at high capacity rates as winter pollution curbs do not appear overly restrictive and steel demand remains solid. In this situation it is likely that iron ore imports will remain resilient, especially from Australia, given the world's top exporter provides mainly benchmark 62 per cent ore and lower grades, and less of the more expensive higher-grade material. Reuters
Chinese bid for ailing British steelworks triggers bout of Sinophobia https://www.afr.com/world/europe/ch...s-triggers-bout-of-sinophobia-20191113-p53a1h Hans van LeeuwenEurope correspondent Nov 13, 2019 — 4.39am London | A UK government deal to sell insolvent British Steel to Chinese behemoth Jingye Steel has prompted fresh debate over Britain's economic and security relationship with the rising Asian power. Jingye, headed by former Chinese Communist Party official Li Ganpo, will reportedly shell out up to £70 million ($131 million) for the stricken company and has committed to invest £1.2 billion over 10 years in upgrading plant and equipment. Political priorities... There are 4000 jobs at stake in a marginal seat. AP The Chinese bid, which Jingye said would revive British Steel's "glory days", has knocked out a rival play from Sanjeev Gupta, the British billionaire steel magnate who owns the Whyalla steelworks in South Australia. Business Secretary Andrea Leadsom welcomed the news during a visit to British Steel's plant in Scunthorpe on Monday (Tuesday AEDT). "I'm feeling very optimistic - the deal is not finalised yet but it is really good news," she said. But not everyone has welcomed the decision, with politicians from both sides of the aisle expressing reservations. Some fretted about economic track record of Chinese buyers of foreign assets - what the Daily Mail tabloid called their "predatory history" - while others echoed the US administration's caution over the potential national security implications of selling a strategic British asset. British Steel produces about one-third of the nation's steel output. Lord Adonis, a former Labour minister and now an outspoken member of the House of Lords, said former prime minister David Cameron's failure to tackle Chinese dumping of cheap steel had led to "this bargain basement sale". "China destroys British Steel by dumping cheap steel, courtesy of the Cameron/Osborne government which resisted tough EU anti-dumping measures because they were sucking up to President Xi. Now it buys the remnants for a pittance," he tweeted. Mr Li pledged that his company was committed to "a long journey" and "hard work" to resuscitate the company. But the trade union representing British steelworkers called for cast-iron commitments from the new Chinese owner that it wasn't simply going to strip the company for its technological know-how. Jingye's interest is thought to be in British Steel's specialist expertise in railway tracks and "long products" such as construction girders. Meanwhile, Conservative Party hawk Julian Lewis, who formerly chaired parliament's defence committee, also cautioned against handing "a strategic asset" to a country "that is no friend of ours". "Whilst this decision is not as dangerous as the proposal to let Huawei into our next generation telecommunications system, it is still undesirable that key parts of defence-related industry are continuing to pass under the control of countries politically opposed to our free way of life," media reports quoted him as saying. Ms Leadsom dismissed these concerns, telling the BBC that "there aren't any national security issues with this acquisition". In the midst of an election campaign, Prime Minister Boris Johnson's priority was to save the 4000 jobs at the company's plant in Scunthorpe. His Conservative Party could win the northern English seat from Labour on a 4.25 per cent swing. British Steel went into liquidation in May, and the government's Insolvency Service had been in talks with Mr Gupta's Liberty Steel, a Turkish military pension fund, and Jingye. It was previously owned by private equity investor Greybull, who bought it for £1 from Tata Steel in June 2016. Tata still owns the much larger Port Talbot steelworks, which is also proving difficult to sustain. There's speculation that a Chinese buyer might eventually jump on that asset, too. Mr Gupta's bid is said to have faltered because he planned to replace one of the Scunthorpe plant's blast furnaces with a more efficient and eco-friendly electric arc furnace. Separately, Mr Gupta's Liberty House is looking to offload or restructure Liberty Pressing Solutions, a formerly insolvent company that supplies parts to Jaguar Land Rover and other vehicle manufacturers. "Options under consideration include the possibility of strategic partnerships, joint ventures, new business development and acquisitions as well as potential investors for the business," a Liberty spokesman told Sky News.
Rio says China is showing growing appetite for iron ore Peter KerResources reporter Apr 8, 2020 – 12.01am https://www.afr.com/companies/minin...growing-appetite-for-iron-ore-20200407-p54hxi Australia's biggest trading partner is rebounding quickly from its encounter with the coronavirus and showing a strong appetite for Australian iron ore, says Rio Tinto iron ore boss Chris Salisbury. In a positive sign for Australia's most lucrative export industries, Mr Salisbury said a worrying surge in Chinese steel stockpiles during February had started to recede, suggesting the Chinese construction sector was emerging from hibernation and demand for Australian commodities would hold firm. Chinese ports like this one in Dalian are working hard again. Sheng Li ''We are very pleased in the way China has come back so fast. They had their own challenges associated with the virus and the slowing of their economy, but what we saw right through that period was iron ore demand did not change,'' he told Perth radio station 6PR on Tuesday. ''The downstream industries did slow or shut and we saw steel stockpiles start to rise dramatically, which was a concern, but I am pleased to say that since China has returned to work, we are now seeing steel stockpiles falling, our order books are full, we have ships off the coast waiting to be loaded so our business continues to operate more or less unaffected.'' The comments support economic data published by China last week, which suggested the economy had rebounded to growth in March after contracting in February. Rival iron ore miner Fortescue Metals Group had predicted in February that the key indicator for iron ore demand this year would come in April and May when Chinese construction activity traditionally increased. UBS analysts said the Chinese steel sector was more focused on the country's domestic steel demand than the more export-oriented steelmakers in Japan, Korea and Taiwan, and therefore would be as affected by slowing economies in Europe and the US. ''We think that the fundamentals for iron ore and coking coal are more exposed to a China on the mend, not to mention the already tight fundamentals and also supply-side complications out of South Africa, Canada and Brazil,'' said the analysts. Showing resilience Unlike prices for copper, zinc and aluminium, prices for iron ore have been resilient through the pandemic. The benchmark price was steady at $US83.30 a tonne on Tuesday. That resilience is partly owing to weak iron ore supply from Brazil and cyclone disruptions in Western Australia in February. Rio's ports and mines were hardest hit by that cyclone, but port data published by UBS last week suggested Fortescue was largely unaffected and was on track to beat its guidance and ship a record 177 million tonnes in the year to June 30. Big falls in the Australian dollar and oil prices over the past three months have dramatically lowered the cost of wages and transport for Australian miners, who are tipped to export $101 billion worth of iron ore in the year to June 30. If Fortescue exports are in line with UBS estimates, the miner's profits are also likely to reach a record high in fiscal 2020. ''The major [miners] with iron ore exposure should continue to pay healthy dividends, with yields well above those offered in other sectors and above that of the ASX 100 on average,'' said Macquarie analysts in a note While the economies of Japan, Taiwan and Korea have not rebounded as quickly as China's, Mr Salisbury said the prospect of more economic stimulus in China was the most important thing for Rio, given that more than 70 per cent of its iron ore was sold to Chinese mills. ''The rest of the Asian economy is not travelling that well, but the Chinese economy seems to be recovering and of course that is the main point for our business. China is also launching stimulus programs so by the end of the year we could see some upside in terms of steel demand and therefore iron ore demand,'' he said. Rio has better insights into China than most ASX listed companies, given its biggest shareholder is a Chinese state-owned entity and it sourced 51.3 per cent of its total revenue from China in 2019. Japanese customers provided 8.9 per cent of Rio's revenue and the rest of Asia provided 10.6 per cent. Iron ore is Australia's most lucrative export industry and Rio ships more Australian iron ore than any other company.
Down Under, the Iron Ore Party Is Still Rocking Clara Ferreira Marques, Bloomberg News https://www.bnnbloomberg.ca/down-under-the-iron-ore-party-is-still-rocking-1.1424354 (Bloomberg Opinion) -- Last year was supposed to be an aberration for iron ore, an unexpected period of sky-high prices after a fatal dam collapse in Brazil and a tropical cyclone in Australia. Instead, it continues to defy gravity. Sheltered from the worst of the pandemic upheaval, Australian diggers like BHP Group, which reported stable output for the March quarter Tuesday, can expect to benefit. Rio de Janeiro-based Vale SA warned just weeks ago that weak demand from steel mills outside China would hurt iron ore as the coronavirus spreads, industrial appetite shrinks and producers bring down the shutters. The first part of the statement has proved accurate: Bloomberg Intelligence forecasts that pandemic-linked manufacturing shutdowns, especially among automakers, will drag demand down by 10% to 15% in the U.S. and Europe this year. BHP says it expects steel outside China to contract by a double-digit percentage, as logistical difficulties and collapsing demand force customers to cut back. Yet prices remain surprisingly robust, with Singapore futures hovering around $83 per metric ton. The main explanation sits with China, where furnaces and construction projects are recovering. The country accounts for about 70% of global demand for seaborne iron ore, so a rebound there matters far more than pain elsewhere. By way of example, China’s import requirements amount to about 1.1 billion tons, against 100 million for Europe. While the risk of a second wave of infections remains, China’s return to work is real: Port stocks have been steadily reducing, while premiums for higher-quality material have been unusually high. BHP estimates electric-arc furnace utilization has recovered to 56% after falling to 12%. It’s true that exporters of finished products such as excavators will be hit by a weak global economy, but a lot more ore is gobbled up for the giant home market. Alongside that, global supply is doing worse than many expected. Granted, widespread closures aren’t just a problem for iron ore. Coronavirus stoppages are hitting other commodities like copper, where Chris LaFemina at Jefferies estimates 20% of supply is now impacted, versus 8% for global iron ore. That supply crunch is supporting base metals and other commodities to the point that China’s grim first-quarter economic data left the metal uncharacteristically unruffled Friday. For iron ore, there’s more. On top of the pandemic, there are ongoing disruptions: specifically, upheaval at Vale, which is still struggling with permits as it tries to recover from the Brumadinho dam collapse. On Friday, the company cut 2020 production expectations for iron ore fines to 310 million to 330 million tons, from 340 million to 355 million, while warning the fallout from the health crisis could get worse. The Brazilian government’s poor handling of the pandemic means it isn’t impossible to imagine a drop to 2019’s level of 302 million tons — a significant loss to a large, though tight, seaborne market. For producers Down Under, none of this is bad news. While in copper everyone is suffering as large mines from Latin America to Africa slow or stop digging, the pain in iron ore hasn’t been equally distributed. Australia’s enormous Pilbara operations have by and large kept going, with exports up significantly last month. Vale is benefiting from higher prices that may cushion output losses; by contrast, the big Australians are digging and selling more, too. BHP reported a 3% increase in production for the nine months to the end of March. Rio Tinto Group, now the world’s top producer, last week also reported higher first-quarter output and shipments, compared to a year earlier. Better yet, costs are coming down. That’s thanks to the effects of a weaker domestic currency against the U.S. dollar, rock-bottom oil prices and still-depressed shipping rates. BHP’s unit costs for Pilbara already hovered around $13 per ton. At the same time, realized prices have held — BHP says its average in the March quarter was just over $74 per ton, down just 5% on the six months to December. That will help offset damage in harder-hit commodities, particularly oil. It’s unclear how long this corner of the commodities market will continue to hold up. Other producers may well limp back, adding to supply, and China could face further virus setbacks. For now, Brazil looks vulnerable and China robust. It may be another unexpected year of grace for iron ore.
19h ago https://www.bnnbloomberg.ca/mining-...from-ex-spies-in-bitter-legal-fight-1.1439996 Mining Billionaire Gets Help From Ex-Spies in Bitter Legal Fight Thomas Biesheuvel, Bloomberg News (Bloomberg) -- Black Cube, the private intelligence agency run by former Israeli spies, spent months setting up companies around the world. Offices, websites and employees were painstakingly put in place -- all part of a sting targeting former executives at Brazilian mining giant Vale SA. The Black Cube operation, made public in a court filing Thursday and described by people familiar with it, represents the latest escalation in a bitter fight between Vale and mining billionaire Beny Steinmetz. What started in Guinea as a partnership in one of the world’s richest mineral deposits has devolved into a globe-spanning dispute that sheds light on how fortunes can be made and lost in the world of African mining. As surging Chinese demand for raw materials spurred a race for assets in Africa, Steinmetz acquired the rights to an iron-ore project known as Simandou in 2008. Vale bought a 51% stake about a year later. Then a new president in Guinea seized the asset back after a corruption probe -- and Vale is pursuing Steinmetz for compensation. While Steinmetz has always denied wrongdoing, he says in the filing that Vale suspected all along that his original acquisition of the assets could have been problematic. Vale has said in court documents it didn’t know. Steinmetz says the sting operation -- detailed in court filings that include a declaration from one of Black Cube’s founders and transcripts of conversations with former Vale executives -- showed the Brazilian company was suspicious before it signed the deal. That undermines Vale’s claim to compensation, he argues. A spokesman for Vale, which was awarded $2 billion in a London arbitration last year that it is still trying to collect, declined to comment. “This report just confirmed what we were saying from day one. Vale knew everything, there was no surprise for them. Now we have the full proof of that. I was happy to see that, because until now we were fighting and no one believed us,” Steinmetz said in an interview with Bloomberg News this week. For almost a decade, Steinmetz has faced legal challenges and probes over how he obtained the rights to the deposit in Guinea. The Guinean government withdrew charges of corruption against him after a seven-year dispute. He denies any wrongdoing. Last year the London Court of International Arbitration found that Steinmetz’s BSG Resources Ltd. made fraudulent representations to Vale when it sold the mine stake. Steinmetz’s appeal was thrown out. The court ordered BSGR to pay the Brazilian company $2 billion for its losses in the joint venture. To collect the cash it is owed under that order, Vale has sought to freeze Steinmetz’s assets and is asking a U.S. judge to help it secure evidence about investments he and others allegedly made in New York real estate. ‘Nose Closed’ In a conversation with Black Cube’s undercover operatives -- according to a transcript filed with the court documents -- former Vale executive Jose Carlos Martins said he’d had suspicions about the deal. While he recommended Vale go ahead with the purchase, “I’m proposing it with my nose closed because I smell something wrong,” he said, according to the transcript. Martins, who spent almost a decade running the company’s iron ore business, didn’t respond to requests for comment. In the transcript, Martins compared the deal to a beautiful woman with a sexually-transmitted disease. “You bring her to your hotel room, she’s naked, marvelous, and then she says: ‘A little problem, maybe I am with AIDS’, okay? It’s a problem.” Black Cube, which says on its website it hires veterans of the Israeli intelligence community, had a team of more than 20 agents working on the investigation, according to people familiar with the situation. It specializes in targeting human sources for information, often in cases where little or no documentary evidence can be found. The company mapped out all those it believed could have information on the case and built psychological models of its targets, before deciding on the best cover stories and approaches, the people said. The operative who spoke to Martins presented himself as a partner in an investment consultancy, and all recordings were legal, Black Cube says in the court papers. ‘Don’t Tell Me’ Martins told the Vale board about entering the deal “closing our eyes,” he said to the operative, according to the transcript. “One of the board members said, ‘Don’t tell me, I don’t want to know at all.’” At the beginning of the last decade, Simandou was seen as one of the most strategically important assets in the mining world. Its development was a threat to the three dominant iron ore miners, Vale, BHP Group and Rio Tinto Group, at a time of insatiable Chinese demand for the steelmaking ingredient. It was in that context that Vale wanted the asset. “Everybody knows that there was something wrong,” Martins told the undercover agent, according to the filing. “Myself, the CEO. But it was so important not to let this buying to get the competition hands.” Black Cube also targeted another former Vale executive, Alex Monteiro. According to the transcript, he told operatives: “All the diligence we did was fine, but still, there was that smell of something that could have been done wrongly.” When approached for comment by Bloomberg on Thursday, Monteiro said the due diligence didn’t produce any concerns. “Based on an in-depth due diligence we did, there was no bad smell,” he said by email. Dying President Steinmetz, 64, has a long history in difficult environments across the globe after having been originally sent out by his family to secure supplies of rough diamonds. He developed a diamond mine in Sierra Leone before setting his sights on Simandou in neighboring Guinea. Ailing President Lansana Conte stripped Rio Tinto of its rights to half of the asset, which the Anglo-Australian miner hadn’t developed in a decade of control. The rights lost by Rio were transferred to Steinmetz weeks before the president died in 2008. Then BSGR sold half the asset to Vale. After Alpha Conde was elected in 2010, he announced a review and clean-up of the mining industry, Guinea’s main source of income. Billionaire George Soros and former U.K. Prime Minister Tony Blair advised on and funded Conde’s initiative. A dossier of alleged corruption became the basis for BSGR’s loss of rights. BSGR denied it paid any bribes. In 2014, a Frenchman with ties to Steinmetz and BSG Resources was sentenced to two years in prison for interfering with a U.S. probe of bribery in connection with mining rights in Simandou. Steinmetz is also facing corruption charges in Switzerland over the mining asset, which he denies. ©2020 Bloomberg L.P.
Looks like you are hard at work researching, understanding and analyzing the mining stocks you traded. It is a lot of work. Not like what you said before when I said trading was hard work: Now I know why you have been a successful trader for over 30 years!
I've largely moved away from trading mining stocks as that sector has and still underperforms. I trade a bit of the gold sector, however I dislike it. Gold makes me money but it's damn hard work, gold is a pain in the ass.