BREAKFAST DEALS: Minted OZ Minerals

It may be time for OZ Minerals to consider spending, while Rio Tinto looks to share the costs in Mozambique.

OZ Minerals boss Terry Burgess has shown remarkable patience when it comes to the miner's war chest. Now he's probably got even more flexibility. Rio Tinto is thinking about possible partnerships to extract some value from its disastrous Riversdale Mining play. Meanwhile, National Australia Bank shares will jump at the mere thought of a UK exit and two global investors are talking Australian agriculture and Australian infrastructure.

OZ Minerals

Copper-gold miner OZ Minerals went through all of 2012 with boss Terry Burgess having stated for the record that a big purchase with the company’s war chest was his "main focus”. We’re in 2013 right now and OZ is still sitting on a lot of coin.

That’s not through lack of trying. The company made a play for a Romanian copper mine last year, but missed out in the bidding contest. The focus has been on smaller plays.

Analysts and shareholders have been agitating Burgess for some time to make a purchase, with stakes in Sandfire Resources and Toro Energy representing go-to targets for the cashed up chief. While the OZ boss is keen to make such a purchase should the opportunity present itself, he’s not trigger-happy on the $1 billion war chest and should be applauded for it.

Now it looks like Burgess might have even more time flexibility. OZ shares are up 8.4 per cent over the last three trading days, with yesterday’s 2.7 per cent bump coming on the back of news that its Carrapateena deposit is looking like a better quality site than first thought.

This is important because much of the case being thrown at Burgess to deploy his cash on another asset is OZ’s flagship project Prominent Hill is expected to come to a close around 2020. The Carrapteena deposit will take a while to get up and running, which has previous caused concern that the company might have a production gap.

Not to worry says Burgess. The option of bringing the production on Carrapteena forward has already been talked about and Prominent Hill’s lifespan could extend beyond the original 2020 estimate. No big acquisition is absolutely required.

While we’re not saying that OZ will avoid a big purchase, Burgess should be congratulated for not caving in to investor demands for a big buy.

The departure of Rio Tinto boss Tom Albanese on the back of writedowns to the Alcan and Mozambique assets, along with the question marks hanging over National Australia Bank’s UK business, serve as a reminder that buying big a very risky proposition.

Rio Tinto, Riversdale Mining

On that note, Rio Tinto is conducting a review of its Mozambique coal business with an eye towards possible joint ventures or asset sales.

The mining giant picked up Riversdale Mining in June 2011, which wasn’t actually that long ago. Fast-forward a year and a half and the $US3.9 billion ($3.7 billion) price tag has been written down by three-quarters.

According to media reports, Rio is now reviewing the business to see where cost can be cut or at least shared with other players.

You can probably bet that Rio will start talking to the other two major Mozambique players, London’s Anglo American and Brazil’s Vale, about linking up in some way, probably on infrastructure.

Anglo American is reportedly set to reveal its own writedown at its upcoming results relating to its platinum business.

National Australia Bank, Santander, Clydesdale Bank, Yorkshire Bank

National Australia Bank shareholders have given chief executive Cameron Clyne a pretty unambiguous signal that they’d like to see the lender’s UK business find a Spanish owner.

NAB shares almost single-handedly kept the market in positive territory yesterday as the market digested the news that Spanish lender Santander is thought to be considering a £2 billion ($3.2 billion) bid for Clydesdale Bank and Yorkshire Bank.

That’s despite the reality that £2 billion looks like a very generous number given the depressing state of the northern UK, where the two businesses largely reside. If the story is correct, that figure might reflect Santander’s respect of Clyne’s disinclination to sell out at any price. But it’s expensive, no doubt, even if it is £600 million below book value.

The story that Santander is interested in Clydesdale and Yorkshire after missing out on the Royal Bank of Scotland branches doesn’t sound like a lock either. The RBS assets were further south where the property markets are stronger and bad debts are less of an issue.

Shareholders of all shapes and sizes have come out of the woodwork to encourage Clyne to go down the Santander path, even without confirmation that the two parties have even talked.

Ontario Teachers’ Pension Plan, BlackRock

Two of the world’s largest institutional investors are interested in increasing their Australian investments with two specific sectors in mind – agribusiness and infrastructure.

BlackRock, the world’s largest money manager, has declared its interest in Australian dairy and gain assets via comments from the investor’s BGF World Agriculture Fund co-manager Desmond Cheung.

"The grain handling and export sector and dairy sector are areas Australasia is competitive in the global market,” Cheung says.

GrainCorp is front-and-centre of the agribusiness M&A story, with Archer Daniels Midland sitting on the register with a $2.8 billion takeover proposal on the table, that the target has rejected.

It’s expected that Australian agriculture assets will get a lot of attention this year as investors shift focus from the hard commodity boom to the soft commodity boom. BlackRock’s words really just confirm what we already know.

Meanwhile, a senior figure from the all-important Ontario Teachers’ Pension Plan has also nominated Australia as a preferred investment destination, with a particular emphasis on infrastructure.

"We are a global investor and we look to numerous markets across the world, but we do find Australia is one of the attractive ones that we want to pay attention to,” the Canadian fund's senior vice-president in charge of global infrastructure Stephen Dowd told The Australian, published by the same company as this website.

Again, this is a reflection of an investment trend that many more big players will be dwelling on.

Wrapping up

Deloitte and Baker & McKenzie have picked up advisory roles with the panel set up to consider James Packer’s plans for a $1 billion, six-star casino at Barangaroo, according to The Australian Financial Review.

David Murray is heading up the panel, which also includes Victorian Gambling Commission chief Peter Cohen, to mull over the proposal as Packer also waits for word from regulators about whether he can build a larger stake in rival operator Echo Entertainment. There are a lot of moving parts to this one.

WorleyParsons has collected a three-year contract with Shell Gas Iraq BV to deliver project management support and services for the gas facilities of Basrah Gas Company. The mining services company didn’t reveal how much the contract is worth.

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