Archive for the ‘AQUISITIONS’ Category

Indian billionaire wants to buy Australian gold mines

Friday, April 3rd, 2015

Indian billionaire wants to buy Aussie gold mines

Indian jewellery billionaire, Rajesh Mehta, is said to looking for Australian gold assets as several miners are in the process of shedding non-core operations to survive the current squeeze on the industry.

According to Financial Review, the tycoon said his company is ready to spend up to US$700 million on growing its presence Down Under, with mines being the primary focus.

Bangalore-based Rajesh Exports, India’s biggest jewellery maker, is already setting up a subsidiary in Melbourne, which will drive the hunt for stakes in the local gold sector, Mehta said.

Earlier this year, the company announced it would create a new division for offering gold loans. If it goes ahead Rajesh Exports would become the first large jewellery firm to provide bullion-backed loans in India

China claims to hold over 2 million tonnes of uranium deposits

Friday, April 3rd, 2015

China claims to hold over 2 million tonnes of uranium deposits

Chinese authorities have unveiled the results of study into the nation’s uranium deposits, which puts its reserves at over 2 million tonnes, government’s Xinhua News Agency reports.

According to the head of China Nuclear geology (CNG), Du Yunbin, the country’s uranium deposits have doubled in the last 15 years to more than 350 across the nation.

The news come as China continues to expand its nuclear program, officially resuming construction of new plants after a 15-months hiatus, beginning with the fifth unit at the Hongyanhe nuclear plant in Liaoning.

With the move, Beijing intends to become self-sufficient not just in nuclear power plant capacity, but also in the production of fuel for those plants.

Domestic uranium mining currently supplies less than a quarter of China’s nuclear fuel needs, according to data from The World Nuclear Association. Exploration and plans for new mines have increased significantly since 2000, and state-owned firms are also acquiring uranium resources internationally.

To boost discoveries, the nation has created a multi-dimensional search system for uranium mines, which includes space remote sensing as well as airborne, ground-based and deep-mining exploration, the official said.

Supporting new projects will be critical to China achieving its 2020 target of 58 gigawatts of installed nuclear capacity by 2020, up from about 20 gigawatts today. The government wants to raise the role of nuclear-power production in China’s energy mix, part of an effort to draw down reliance on polluting coal.

China is the world’s largest nuclear growth market. The country operates 24 reactors currently and a further 25 are under construction, out of 68 globally, according to the IAEA.

While Beijing doesn’t disclose total spending, estimates based on the cost of reactors show the country is investing tens of billions of dollars in potential new business for Chinese and foreign companies over the coming decade

OOO

Henry Sapiecha

Peregrine Diamonds acquires Botswana-based explorer

Thursday, April 2nd, 2015

Peregrine Diamonds acquires Botswana-based explorer

Canadian Peregrine Diamonds (TSX:PGD) said Monday it will acquire Botswana- focused junior explorer Diamexstrat, which owns eight prospecting licences in the southern African nation .

The purchase agreement transfers DES Botswana to Peregrine in consideration for a 1% gross overriding royalty to owner Diamond Exploration Strategies (DES UK) Ltd. In addition, Peregrine will assume a $450,000 loan, which it advanced to DES Botswana.

The deal allows Peregrine to buy out the royalty provisions at various milestones. Peregrine can pay $2 million if within 60 days of the discovery of a diamondiferous kimberlite, as defined by confirmation of the presence of microdiamonds or recovery of macrodiamonds in drill core/percussion chips; or $5 million if within 60 days of delivery of pre-feasibility study; or $7.5 million if within 60 days of positive construction decision. If Peregrine decides to not pursue exploration on any of the licenses, the title for those licenses revert to DES UK and Peregrine shall be granted a 1 percent gross overriding royalty with the same buy-out provisions.

As part of the transaction, DES UK will enter into a services agreement with Peregrine under which it will provide Botswana-based operational management. The transaction is expected to close on April 15.

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Henry Sapiecha

Chinese company on the verge of starting to mine uranium in Namibia

Thursday, April 2nd, 2015

Chinese firm close to start mining uranium in Namibia

China General Nuclear Power Holding Corp (CGNPC), the country’s biggest producer of nuclear energy, is getting ready to begin mining for uranium at its Husab mine, located in western-central Namibia.

According to African Review, the clean energy corporation intends to start processing the ore in February 2016, with operations slated to begin later this year.

CGNPC, which acquired the mine after taking control of Kalahari Minerals and Extract Resources, has spent over US$2bn in the project since work began in 2012, which makes it China’s largest investment in the African nation so far.

Once fully operational, Husab mine will have the potential to produce 15 million pounds of uranium oxide.

Once fully operational, Husab mine will have the potential to produce 15 million pounds of uranium oxide.

Canada’s Cameco Corp (TSX:CCO), the country’s biggest uranium producer, has been signalled in the past as potential buyer for offtake output from the project, located 8 kilometers (5 miles) south of Rio Tinto Group’s Z20 deposit in the Namib-Naukluft national park.

Uranium mineralization was first discovered in the Namibia’s Rossing Mountains, Namib Desert, in 1928 by Capt. G. Peter Louw. Uranium exploration official started in 1960s with Rio Tinto obtaining exploration rights for the Rössing deposit in 1966. It started production in 1976.

The Rössing mine is currently Namibia’s longest running and one of the world’s largest open pit uranium mines.

Image courtesy of Swakop Uranium.

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Henry Sapiecha

Welcome to the world of Big Chocolate

Friday, December 19th, 2014

Olam’s purchase of Archer Daniels Midland’s cocoa processing business announced this week catapults the company into the premier league of chocolate. It also leaves the sector in the grip of three companies.

Three companies will dominate processing sector

Barry Callebaut, the Swiss-based cocoa and chocolate group, Cargill, the US privately owned commodities trader, and Olam’s newly expanded cocoa business will account for about 60 per cent of the world’s cocoa processing — once the deal with ADM is completed. It is the world of Big Chocolate.

dark chocolates image www.www-globalcommodities.com

The sector, which “grinds” cocoa beans into butter, powder and liquor used to make chocolate and flavourings for confectionery and desserts, has become increasingly concentrated over the past few decades due to the capital intensive nature of the business.

Many of the deals can be traced back to the merger between Belgian industrial chocolate maker Callebaut and Cacao Barry of France in 1996, which kick-started the sector’s consolidation.

At the start of the 1990s there were about 40 or so significant grinders. In just a decade that figure stood at nine, with ADM, Barry Callebaut and Cargill dominating the sector ever since. According to the United Nations Conference on Trade and Development, the “ABC” of cocoa accounted for 41 per cent of the world’s processing capacity in 2006.

ADM, along with Cargill, changed the nature of cocoa trading and processing in the 1990s when they bought their knowledge of grain trading into the sector.

Since then, the bigger companies have grown even more powerful by adding new capacity. In 2013, Barry Callebaut bought the processing business of Asian group Petra Foods, cementing its position at the top of the table.

Gerry Manley, Olam’s global head of cocoa, made clear that the company needed to be a leading player in processing to remain “strong” as the company announced its deal with ADM.

Arguably, the cocoa traders and processors are playing catch up with their customers — the chocolate makers. The sector has also seen rapid consolidation, with the top five manufacturers, including Mars, Mondelez and Nestlé, accounting for more than 65 per cent of total confectionery sales.

Chocolate Production Continues At Cadbury During Hostile Takeover Bids

The importance of global brands and rising research and development and marketing costs in an increasingly international and competitive market has pushed consolidation.

According to Ecobank, 70 per cent of the value of the chocolate bar goes to cocoa and chocolate companies reflecting investing R&D and marketing, 17 per cent goes to retailer, 7 per cent goes to intermediaries such as traders.

But as Big Chocolate gets bigger, cocoa farmers are finding themselves increasingly squeezed.

Growers only get 6 per cent of the chocolate bar, down from 16 per cent in 1980, says Edward George at Ecobank. “So little of the value goes into the raw material,” he says.

Leading cocoa and chocolate companies have now united in an action plan to try to support growers to encourage “sustainable” sources of cocoa beans. But, unless that value share changes or the whole pie gets bigger, farmers will find little incentive to continue growing cocoa.

The Commodities Note is an online commentary on the industry from the Financial Times

Henry Sapiecha

RARE EARTH PROPERTIES ACQUIRED BY NORTH BAY RESOURCES IN BRITISH COLUMBIA

Thursday, August 4th, 2011

North Bay Resources acquires two BC rare earth properties

Marketwire | August 4, 2011

North Bay Resources Inc. announced on Wednesday that the Company has acquired a 100% undivided interest in two rare earth properties in southeastern British Columbia.

The Perry River Carbonatite property covers 505 hectares (1,247 acres) and is located approximately 42 kilometres northwest of Revelstoke, BC. The property is known to host niobium, lanthanum, cerium, neodymium, and other REEs.

Sourced & published by Henry Sapiecha

BHP BILLITON STRIKES GOLD IN AQUISITION FAILURE

Saturday, February 26th, 2011

BHP’s strategic success

from takeover failure

February 15, 2011

If there’s one thing the latest WikiLeaks missive reveals about BHP Billiton, it is that the company’s much derided takeover strategy hasn’t been the disaster that many large shareholders claim.

BHP supremo Marius Kloppers no doubt is smarting over the leaked cables from US consul general Michael Thurston back to his masters in Washington. They reveal the kind of candid comments one would expect in a meeting between a corporate heavyweight and a representative of the US government on sensitive issues regarding the world’s fastest-growing economy, China.

But the leaked cables also highlight just how successful BHP was in railroading the contentious tie-up between Rio Tinto and the Chinese government-owned Chinalco, a deal that would have been disastrous for Australia’s national interests and that would have seriously undermined BHP’s ability to operate in China.

BHP’s big institutional shareholders, particularly those in the UK, have made it clear that they have been underwhelmed by the vast millions of dollars spent on advisers and consultants since 2007 on three massive merger proposals that never eventuated. In recent months, they have called for a halt to the mega mergers and insisted the company return a large part of the cash being generated by the resources boom.

In particular, many questioned the wisdom of BHP’s much vaunted joint venture proposal with Rio Tinto’s West Australian iron ore operations. Why proceed down that path when it was clear European regulators raised objections about that very issue two years earlier when BHP launched its hostile takeover bid for Rio Tinto?

The answer is now clear. To stymie Chinalco, BHP needed to offer Rio Tinto an alternative. It needed to offer its great rival a compelling reason to dump the Chinese government, a legally binding, superior offer that Rio directors could not refuse.

At the time, Rio’s new chairman Jan du Plessis was looking for an exit strategy from the China deal. With commodity prices rebounding, the Chinalco deal – struck out of desperation by a debt-laden Rio – was looking even less attractive and Rio shareholders were in open revolt.

Kloppers handed him the perfect opportunity. And while much of the attention focused on the potential synergies of the iron ore merger, the real value rested in severing the link between the Chinese government and Rio Tinto, a link that would have delivered the world’s biggest consumer of iron ore control of the world’s primo deposits.

The value for BHP in successfully killing that deal? Immeasurable.

iverrender@smh.com.au

Sourced & published by Henry Sapiecha


ACQUISITIONS ON THE AGENDA BIG TIME FOR THE COMING YEAR

Saturday, January 8th, 2011


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Better times bring return of the deal

It took a while, but the market’s appetite for acquisitions has returned with gusto.

THE markets didn’t need the Goldman Sachs deal with Facebook this week, valuing the social network at about $US50 billion, to confirm that last year’s late binge of deal doing would continue well into the new year, but it helped keep the champagne corks popping.

After the drought of 2008 and a quiet start to 2009, normal services have resumed.

”When the GFC hit, most people swapped into a short-term survival mode,” says Allens Arthur Robinson corporate partner Richard Kriedemann. ”The second half of last year saw things return to a more normal, longer-term trend.”

And the party isn’t confined to the latest crop of Silicon Valley dotcoms either. After all, the sliver of money actually being handed over to Facebook by Goldmans and other friends – $US450 million – pales into insignificance beside the $US40 billion that BHP Billiton offered in a failed bid for Canada’s Potash Corp last year.

The setback is not expected to stop the miner from attempting another one or more  multibillion-dollar acquisitions this year.
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Also it’s not like all the deal-making in the resource sector has been confined to BHP, as shown by Newcrest’s $24.5 billion merger with fellow gold producer Lihir.

The resource sector wasn’t the only dealer in the mix, with AMP playing its part in the $13.3 billion mop-up of AXA Asia Pacific – the biggest Australian-based transaction of the year and the third-biggest Asian-based takeover.

It helped mergers and acquisitions activity in Australia more than double last year to $US164.4 billion, according to figures from Thomson Reuters, giving the lucky country a significant chunk of the $US474.6 billion in activity in Asia, excluding Japan.

There are no prizes for guessing the resource sector is expected to continue to lead activity this year.

Rio Tinto’s recent $3.5 billion bid for coal producer Riversdale Mining is a taste of things to come, with Chinese interests also continuing to scour the country for strategic stakes in other commodity suppliers.
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And after BHP’s recent failed attempts to expand with a Rio tie-up and Potash – the world’s regulators appear to be of the view that BHP is getting a little too big – energy may prove to be the only viable expansion option.

BHP is expected to devote a chunk of its growing pile of cash to an acquisition in the oil and gas sector, with more than 20 independent exploration and production (E&P) companies in the US market on its watch list.

It was against that background last week that London’s Daily Mail tipped BHP was considering making a $US90-a- share, or $US45 billion, bid for Anadarko Petroleum. BHP watchers say Anadarko is not the only potential multibillion-dollar deal in the company’s sights.

BHP may look to take out Noble Energy, a $US15 billion company and operator of the big Leviathan gas discovery off Israel, or Cobalt International Energy, valued at $US4.3 billion.
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A more tantalising prospect is BHP as a potential suitor for Woodside Petroleum, which went into play last year after Shell sold a 10 per cent stake for $3.3 billion. This implicitly put its remaining 24 per cent stake in play for the right buyer.

The resource sector’s appetite for acquisitions, locally and overseas, is to be expected given the strength of company cash flows, their stock, and the Australian dollar, but it is not expected to stop overseas interest in Australian companies across the board.

Kriedemann says a return of private equity this year will see a surge in deal making in Australia.

”There have already been a number of privately negotiated deals occurring and I don’t think you can point to any one area of the economy and say it will be immune from M&A activity in the next 12 months,” Kriedemann says.
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Freehills’ merger specialists, Tony Damian and Neil Pathak, agree.

”The conservatism of the last three years has resulted in many large and mid-market companies with low gearing and stable cash flow . . a nice combination for a private equity pursuer,” they wrote before Christmas.

”The time to strike would seem to be now, particularly, before the general economy improves and asset prices increase.”

Private equiteers TPG and the Carlyle Group certainly don’t need any prompting on this point, they joined forces last year to acquire Healthscope for $2.7 billion.

Another strong theme Damian and Pathak expect to continue this year is strong overseas interest in Australia’s agriculture sector, which saw takeovers last year of AWB by Canada’s Agrium, CSR’s sugar business, Sucrogen, by Singapore’s Wilmar International, and Ricegrowers by Spain’s Ebro Foods.
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But it won’t be plain sailing as the Singapore Stock Exchange is finding with its $8.4 billion bid for Australian Securities Exchange and BHP did with Potash.

Intervention by the Australian Competition and Consumer Commission killed several deals last year, like NAB’s tilt for the AXA assets, although not the ASX bid, which is being lost in the corridors of Canberra.

Freehills also expects the Foreign Investment Review Board to be more vigilant this year, especially in relation

to the resource and agribusiness sectors, which are expected to be the main areas of activity.

The law firms says FIRB vigilance reflects a global trend for increased scrutiny of foreign investments.
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”In Australia, this will manifest itself in FIRB probing and seeking additional information and an increased incidence of approvals being granted subject to conditions and undertakings relating to maintenance of Australian head office, industry impacts, pricing of export of product and maintenance of employment. Also expect some outright rejections (which will perhaps be presented as withdrawals of applications),” Freehills says.

Events last year are expected to pave the way for potential M&A candidates this year outside the red-hot resource sector.

A split of Foster’s wine and beer divisions is expected to attract attention, as is Tabcorp’s decision to divide its casino division from its wagering and gaming operations.

Asahi Breweries, Japan’s second-largest brewer and the acquirer of Cadbury’s Australian drinks unit in 2009, reportedly hired advisers to look at Foster’s beer business last year and its president, Naoki Izumiya, said recently it will “aggressively seek acquisitions and alliances” this year.
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The brewer said in April that it may buy food and alcohol companies in the Asia-Pacific region, and has also said it may spend as much as ¥400 billion on acquisitions.

There is more certainty around Tabcorp’s split, although no one is punting on either operation surviving as a stand-alone operation for long, with potential predators already lining up for both divisions.

James Packer’s gambling operation, Crown, has been cited as a likely buyer of Tabcorp’s casinos while Tattersall’s chief executive, Dick McIlwain, has expressed interest in the wagering and gaming business, which would put all Australia’s traditional wagering pools under one roof for the first time.

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The most intriguing transaction of the year is likely to be one of the earliest, with the receivers appointed in controversial circumstances to one of the world’s biggest ammonia producers, Burrup Fertilisers, expected to appoint advisers and fast-track the sale of a 65 per cent stake in the company owned by its founder, Indian entrepreneur, Pankaj Oswal, and his wife.

The entire company was valued at more than $3 billion in 2008 when it first attempted to go public before the GFC.

The receivers report that more than 10 parties are interested. The front runner is expected to be Burrup’s other shareholder, Norwegian fertiliser company Yara International, which also has a long-term agreement with Burrup to buy all its ammonia.

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BHP & RIO TINTO TERMINATE JV FOR IRON ORE PRODUCTION IN AUSTRALIA

Saturday, January 1st, 2011

BHP Billiton and Rio Tinto

Terminate the Iron Ore

Production Joint Venture

18 October 2010

Rio Tintos Sam  Walsh

Back in 2009, BHP Billiton and Rio Tinto signed core principles to establish a production JV covering the entirety of both companies’ Western Australian Iron Ore assets.  This resulted in the signing of definitive agreements on 5 December 2009.  The completion of these agreements was subject to a number of conditions, including regulatory approvals.

Since the agreement was signed it has become increasingly apparent that regulatory approvals of the joint venture are unlikely to be achieved.  Consequently, BHP Billiton and Rio Tinto have reluctantly agreed to dissolve the proposed joint venture.

BHP Billiton Chief Executive Officer, Marius Kloppers, said, “The large synergies from combining our Western Australian iron ore assets with Rio Tinto’s have caused us to persevere in seeking to obtain regulatory approvals.  However, it has become clear that this transaction is most unlikely to obtain the necessary approvals to allow the deal to close and as a result both parties have reluctantly agreed to terminate the agreement”.

Mr Kloppers said he appreciated the high level of cooperation and goodwill displayed by Rio Tinto in pursuing the joint venture.  The parties have mutually agreed that no break fee is payable by either party.

While BHP Billiton was progressing approvals for the joint venture, it has continued to invest in its Western Australian Iron Ore business.  With the termination of the joint venture, this focus on efficiently growing and operating our Western Australian Iron Ore business through our existing Perth-based Iron Ore management team will continue forward.

Sourced & published by Henry Sapiecha

BHP BILLITON & IRON ORE DEALINGS IN AFRICA

Saturday, January 1st, 2011

BHP Billiton and ArcelorMittal

Terminate Discussions to Combine

Assets in Liberia and Guinea

8 September 2010

BHP Billiton and ArcelorMittal had jointly announced they have ended discussions to combine the two companies’ iron ore interests in Liberia and Guinea into a single joint venture. They were unable to reach a commercial agreement. BHP Billiton and ArcelorMittal have continued to advance their iron ore interests in West Africa independently and work closely with governments as well as their communities.

Sourced & published by Henry Sapiecha

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