{"id":851,"date":"2026-02-11T15:47:07","date_gmt":"2026-02-11T15:47:07","guid":{"rendered":"https:\/\/www.europesays.com\/ch\/851\/"},"modified":"2026-02-11T15:47:07","modified_gmt":"2026-02-11T15:47:07","slug":"mining-companies-should-be-looking-for-singles-not-home-runs","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ch\/851\/","title":{"rendered":"Mining companies should be looking for singles, not home runs"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Glencore\u2019s Canadian Copper Refinery (CCR) in Montreal in March, 2025.Bernard Brault\/Reuters<\/p>\n

Mining executives have become fixated on hitting home-run deals. <\/p>\n

Last week, Rio Tinto Group swung-and-missed<\/a> on a US$75-billion takeover of Glencore PLC, an acquisition meant to create the world\u2019s largest miner. <\/p>\n

Last fall, BHP Group \u2013 the big dog in the yard \u2013 struck out twice<\/a> on US$30-billion-plus offers for Anglo American PLC. BHP\u2019s bid was meant to foil the deal that spurred the industry\u2019s focus on consolidation \u2013 Anglo\u2019s US$20-billion merger with Vancouver-based Teck Resources Ltd., announced last September and expected to close later this year. <\/p>\n

To steal a strategy from last season\u2019s overachieving Toronto Blue Jays and the analytics-driven world of baseball, mining CEOs may be better off zeroing in on on hitting singles and doubles<\/a>, rather than playing for home runs. <\/p>\n

Partnerships on mining projects and asset sales are far easier to achieve than complex, costly and often controversial takeovers. <\/p>\n

TSX rises the most in six months as U.S. dollar slides, boosting mining stocks<\/a><\/p>\n

Teck fell into Anglo\u2019s arms in part because the company wanted a partner on its Quebrada Blanca Phase 2, or QB2, copper mine in Chile, a US$8.7-billion project that ran massively over budget. Combining QB2 with Anglo\u2019s nearby Collahuasi mine is expected to boost returns from both properties by US$1.4-billion a year <\/p>\n

Glencore had a similar motivation in its latest negotiations with Rio Tinto. (The two companies have now held four rounds of takeover talks in the past decade without reaching a deal.) <\/p>\n

Swiss-based Glencore has two major copper projects under way in the Argentinian mountains, the US$9.5-billion El Pach\u00f3n mine and US$4-billion Agua Rica development. Along with technical challenges, the country comes with significant political risks. <\/p>\n

Argentina\u2019s leaders are prone to treating foreign capital the way a croupier treats chips when the roulette ball lands on zero \u2013 they periodically sweep everything into their own coffers.<\/p>\n

Rio Tinto has deep pockets and Argentinian relationships built on its lithium operations in the country. In a report published Friday, a team lead by RBC Capital Markets analyst Ben Davis said the two executive teams should set aside any ill will generated by the failed deal and team up on projects such as El Pach\u00f3n. <\/p>\n

\u201cThe big deal was fallen away, but the prize for Rio Tinto is still Glencore\u2019s copper,\u201d said Mr. Davis. \u201cGlencore can approach Rio Tinto to partner up on the asset level, which makes the project pipeline more realistic.\u201d <\/p>\n

Last week, shortly before Rio Tinto called off takeover talks, Glencore played small ball. It announced the U.S. government-backed Orion Critical Mineral Consortium would acquire 40 per cent of its operations in the Democratic Republic of Congo. <\/p>\n

The investment valued the properties at US$9-billion, above analysts\u2019 US$8-billion consensus estimate of their worth. Mr. Davis said bringing Orion into the fold \u201cvalues a hard-to-value asset for investors\u201d and decreased Glencore\u2019s exposure to the DRC, which would be a positive for the company.<\/p>\n

For Glencore chief executive Gary Nagle, selling minority stakes in Argentinian and African mines lacks the drama of tying the knot with Rio Tinto. But these multibillion-dollar transactions are straightforward and shareholder friendly. <\/p>\n

The same is true for Rio Tinto CEO Simon Trott, who took the top job in July. He announced up to US$10-billion in asset sales, including exiting titanium and boron mining, prior to getting caught up in talks with Glencore. Finishing those tasks will impress investors who currently value BHP at a premium to Rio Tinto. <\/p>\n

The current round of home-run deals may not be finished. Glencore\u2019s willingness to listen to overtures may attract another suitor.<\/p>\n

\u201cThere is a chance BHP now steps up,\u201d said RBC\u2019s Mr. Davis. He said the Melbourne-based miner covets copper properties such as Glencore\u2019s 44-per-cent take in the Collahuasi mine.<\/p>\n

\u201cThe challenge will be explaining to value conscious Australian investors how they see the value in Glencore when Rio Tinto didn\u2019t,\u201d said Mr. Davis. <\/p>\n

The last round of consolidation among global miners, which peaked in 2007, saw a series of takeovers remake the industry. The majority of these deals ended poorly for the buyers: Glencore, Rio Tinto and Brazil\u2019s Vale SA took significant write downs on Canadian acquisitions.<\/p>\n

If this round of merger mania starts and ends with Teck and Anglo American joining forces, that could be a long-term win for investors. Consistently hitting singles and doubles in mining \u2013 for example, by partnering on expensive new mines \u2013 is shareholder friendly. <\/p>\n

Swinging for the fences with massive takeovers, which come with big price tags and heightened regulatory scrutiny, has never been a winning strategy for miners. <\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Glencore\u2019s Canadian Copper Refinery (CCR) in Montreal in March, 2025.Bernard Brault\/Reuters Mining executives…\n","protected":false},"author":2,"featured_media":852,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[123],"tags":[1064,1051,1065,1042,1040,1066,563,1039,1057,1058,1054,1041,1038,39,1062,457,1056,1049,132,1077,1043,1044,70,1052,1053,899,1067,1047,1072,1073,1075,1070,1074,1068,1071,1045,1060,1061,69,1059,1069,1050,789,1063,1055,1048,1046,1076],"class_list":{"0":"post-851","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-glencore","8":"tag-alberta","9":"tag-arts-news","10":"tag-bc","11":"tag-breaking-news","12":"tag-breaking-news-video","13":"tag-british-columbia","14":"tag-canada","15":"tag-canada-news","16":"tag-canada-sports","17":"tag-canada-sports-news","18":"tag-canada-trafficcanada-weather","19":"tag-canadian-breaking-news","20":"tag-canadian-news","21":"tag-economy","22":"tag-education","23":"tag-environment","24":"tag-federal-government","25":"tag-foreign-news","26":"tag-glencore","27":"tag-globe-and-mail","28":"tag-globe-and-mail-breaking-news","29":"tag-globe-and-mail-canada-news","30":"tag-government","31":"tag-life-news","32":"tag-lifestyle","33":"tag-local-news","34":"tag-manitoba","35":"tag-national-news","36":"tag-new-brunswick","37":"tag-newfoundland-and-labrador","38":"tag-northwest-territories","39":"tag-nova-scotia","40":"tag-nunavut","41":"tag-ontario","42":"tag-pei","43":"tag-photos","44":"tag-political-news","45":"tag-political-opinion","46":"tag-politics","47":"tag-politics-news","48":"tag-quebec","49":"tag-sports-news","50":"tag-technology","51":"tag-travel","52":"tag-trudeau","53":"tag-us-news","54":"tag-world-news","55":"tag-yukon"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/851","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=851"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/851\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/852"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=851"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=851"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=851"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}