Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  London Stock Exchange  >  Anglo American    AAL   GB00B1XZS820

Mes dernières consult.
Most popular
News SummaryMost relevantAll newsofficial PublicationsSector newsTweets

Anglo American : Risk of disappointment for copper bulls as wage deals sealed

share with twitter share with LinkedIn share with facebook
share via e-mail
02/08/2018 | 05:57pm CEST
FILE PHOTO - Sheets of copper cathode are seen at the copper cathode plant inside the La Escondida copper mine near Antofagasta

LONDON (Reuters) - Copper bulls who are betting on labour strife this year due to a full calendar of contract talks may be disappointed if early wage deals at two copper mines are a signpost for further agreements with mine workers.

Benchmark copper prices rallied 12 percent in December, partly due to fear of shortages if workers go on strike since many major operations in top producers Chile and Peru have contacts expiring this year, including at top mine Escondida.

Chile's state-owned Codelco said late last month it had struck a contract deal with workers at its Andina copper mine, while workers at the Lomas Bayas mine accepted a contract offer from operator Glencore Plc (>> Glencore) early in January.

"The risk of disappointment is probably as big as the risk of it (strikes) coming to fruition because just take a look at what happened last year," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

"We had some quite significant disruptions and the price did not actually move that much at the time."

LME Benchmark Copper Price: http://reut.rs/2EuGiso


The world's biggest copper mine, Chile's Escondida, was hit by a six-week strike last year, pushing down output at the operation by 7.8 percent to 903,000 tonnes in 2017.

The strike ended when the union representing the striking workers opted to return to work under the old contract, effectively pushing talks on a new deal into 2018 for the mine operated by BHP (>> BHP Billiton Plc) (>> BHP Billiton Limited).

Last week, the powerful union at the mine cast doubt on chances of starting talks on a new labour agreement with the company before formal negotiations scheduled for June.

Despite the tough talking by the union, several analysts believe there will not be a repeat of last year's extended walk-out.

"Looking at the major Escondida contract due for renewal in June, we would question the appetite for either workers or mining companies to withstand another lengthy strike," ING analysts led by Hamza Khan said in a note.

Several contracts due to be negotiated at other mines are with supervisors or professionals, who are regarded as less likely to strike, UBS analyst Daniel Major said in a note.

Chile Copper Output vs BHP Shares: http://reut.rs/2EGl6xe


Even last year, when the copper market was hit by a series of disruptions, the actual amount of copper lost was less than expected, according to some analysts.

"Last year we were using 5.5 percent but as far as I've got to, it's only realising 5.2 percent so far," said analyst Vivienne Lloyd at Macquarie, adding that the last year's number could not be finalised until all the fourth quarter production reports were released.

Karen Norton at Thomson Reuters GFMS said provisional data showed a disruption rate last year of 5.1 percent, close to the long term average and lower than in 2015, when it hit 6 percent.

Lloyd estimates that the multiple mine contracts up for negotiation this year equals 31 percent of global copper production, but she does not expect extensive strike action.

Last year the world's second biggest copper mine - Grasberg in Indonesia - had stoppages linked to disputes with the government, but operator Freeport-McMoRan Inc (>> Freeport-McMoran) said on Jan. 25 it was edging closer to a permit deal after it agreed to divest a 51-percent stake in the huge mine.

"Now the government actually has the incentive to allow the mine to produce," Lloyd said. "So we actually have a lower (forecast global) disruption rate for this year, 4.8 percent."

Any loss of production through disruptions would be cushioned by an increase in inventories, Hansen said.

Total stocks in exchange-approved warehouses have gained more than a fifth since early December to over 700,000 tonnes.

Copper Mine Disruptions: http://reut.rs/2si4NEj

Exchange Copper Inventories Rise: http://reut.rs/2BGABXn

(Reporting by Eric Onstad; Editing by Adrian Croft)

By Eric Onstad

Stocks mentioned in the article
ChangeLast1st jan.
LME COPPER CASH 0.75% 6886 End-of-day quote.-4.11%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on ANGLO AMERICAN
05/24ANGLO AMERICAN : rough diamond sales value for De Beers' fourth sales cycle of 2..
05/24Deadly protests land a blow to Indian resources magnate Agarwal's ambitions
05/22Anglo American PLC's De Beers Group Sold $550 Million of Diamonds in Fourth C..
05/22ANGLO AMERICAN : De Beers rough diamond sales value cycle 4, 2018
05/16Russia's Alrosa sees rosy prospects from colorful diamonds
05/16Rio Tinto CEO calls for 'United Nations of the mining world'
05/16Rio Tinto CEO calls for 'United Nations of the mining world'
05/15Anglo American to Spin off VC Business -FT
05/14ANGLO AMERICAN : AGM 2018 Address to shareholders
05/11Louis Dreyfus completes $466 million sale of metals unit to Chinese fund
More news
News from SeekingAlpha
05/17REUTERS : Anglo American nears sale of stake in Quellaveco copper project 
05/16Anglo American (AAUKY) Presents At Bank of America Merrill Lynch 35th Annual .. 
05/15FT : Anglo American to spin out unit to invest in hydrogen 
05/09Robust Metals Outlook With Higher Discretionary Spending On Growth 
05/03South African gold miners reach settlement in lung disease lawsuit 
Financials ($)
Sales 2018 27 283 M
EBIT 2018 6 279 M
Net income 2018 3 488 M
Debt 2018 2 644 M
Yield 2018 4,69%
P/E ratio 2018 9,07
P/E ratio 2019 11,07
EV / Sales 2018 1,32x
EV / Sales 2019 1,31x
Capitalization 33 259 M
Duration : Period :
Anglo American Technical Analysis Chart | AAL | GB00B1XZS820 | 4-Traders
Technical analysis trends ANGLO AMERICAN
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 24
Average target price 25,4 $
Spread / Average Target 7,3%
EPS Revisions
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 AMERICAN14.82%33 439
BHP BILLITON PLC11.34%128 344
RIO TINTO8.16%100 885