Terence Ortslan, managing director of TSO & Associates, said in his analysis regarding the mining industry, “There’s a clear message that the market is more interested in cash than in building companies.” this brings to light the growing power of hedge funds in the mining sector.
With a focus on independent mining, minerals and fertilizer research for financial institutions. Ortslan brings a great deal of Investment Industry and technical experience to the world of volatile investment strategy.
An example of major companies looking to hedge funds for financing is Phelps Dodge, the Arizona-based copper producer, who has abandoned it’s pursuit of Inco, leaving Brazil’s CVRD as the only bidder for the Canadian nickel miner.
Phelps joined forces with Inco in June to help finance an improved offer by Inco for Falconbridge, another Toronto-based nickel miner. But they were unable to match a hostile bid by Xstrata, the Anglo-Swiss group, which has bought Falconbridge.
Ortslan said the battles for Falconbridge and Inco illustrated the growing trend in seeking out and using the available cash flow that hedge funds offer.
Inco held out hope that the termination of its friendly deal with Phelps might enable it to drum up interest from other potential buyers. It said management had been authorised to explore “potential value-enhancing alternatives”.
CVRD, which is the world’s largest iron ore producer but has diversified in recent years, has made an all-cash offer of C$86 a share, valuing Inco at C$16.1bn (US$14.6bn).
Terence Ortslan worked as a Senior Mining Analyst with firms such as BBN James Capel, LOM, Merrill Lynch, Deacon Barclays de Zoete Wedd Ltd. and Jones Heward. His Investment Industry experience dates back to the mid 1970’s. He is also a member of the Canadian Institute of Mining and Metallurgy, the Society of Mining and Metallurgical Engineers, the National Association of Business Economists, the Prospectors and Developers Association and the Minerals Industry Analyst Group.
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