Breakingviews

BHP Billiton reaches earnings nadir

August 16, 2016

A ray of light is appearing for the mining giant. Weak global demand and a Brazilian dam disaster were partly to blame for a record $6.4 bln full-year net loss but the worst has passed. As long as prices stabilise, cost-cutting will allow BHP to return more cash to shareholders.

Rio Tinto’s best is not yet good enough

August 3, 2016

The Anglo-Australian miner has slashed debt but can't take its eye off the ball after posting its worst earnings in 12 years. No wonder Rio is trading at a discount to peers. New boss Jean-Sebastien Jacques is paying out dividends, but has his work cut out to win over investors.

Bankers can learn from miners about culture change

June 15, 2016

Rio Tinto, BHP and their peers have spent years improving their safety records. The finance industry can learn a thing or two from the way that miners have tried to clean up their act. Not least is the ambition to attain higher standards than absolutely required by the law.

Ivan Glasenberg may be mining’s last man standing

December 31, 2015

The Glencore chief outlasted his peers when the commodity boom turned in 2013. The sector may be due another shakeout in 2016 if prices keep falling. But Glasenberg’s big stake in Glencore and his newfound dash of humility mean his copper plating should last another year.

Freeport chairman exit eases credibility problem

December 28, 2015

James “Jim Bob” Moffett is leaving the $9 bln mining group he helped found amid pressure from activist investor Carl Icahn. It’s a needed step to restore confidence after faux pas including an ill-timed, cozy-looking 2012 oil deal. His replacement, though, has his work cut out.

Cash calls leave issuers with unfinished business

December 11, 2015

Lonmin and Standard Chartered’s shares have both slipped further than theory might suggest since issuing a combined $5.5 billion of new stock. That’s logical at miner Lonmin, which now has a big stock overhang. For lender StanChart, it looks like a vote of diminished confidence.

Glencore deserves credit for lessons learned

December 10, 2015

The Swiss miner and commodities trader will cut debt even faster than it vowed in September. Planning for copper prices below current levels is wise. Chief Executive Ivan Glasenberg can’t control China’s demand for metals, but at least his balance sheet now reflects reality.

Anglo American is facing a crisis of confidence

December 8, 2015

Collapsing commodity prices led the coal, copper and diamonds miner to suspend its dividend on Dec. 8. It’s also slashing jobs and investment. Big London-listed miners including Anglo American have lost 47 percent of their market value this year. Yet things could still get worse.

Rio Tinto capex cuts won’t stop race to the bottom

December 8, 2015

The Anglo-Australian miner is cutting spending by $1.5 billion to save cash amid the rout in commodities. But it’s not the same as slashing production – which is what’s needed to bring metals prices back up. The current strategy should make shareholders nervous.

Anglo American dividend cut just the beginning

December 4, 2015

Confidence in the mining giant is at rock bottom. Cost savings are paling beside the slide in commodities prices. Anglo American can save the equivalent of one-eighth of its market cap by scrapping the dividend. Shuttering production, and firesales, may now be necessary evils.