Glencore CEO says rivals’ strategy tipping mining sector into crisis

(Reuters) by Silvia Antonioli – The head of mining and commodity trading giant Glencore said on Tuesday the strategy of rival companies to oversupply the market regardless of demand had hit the mining sector’s credibility and tipped it into a confidence crisis. Chief Executive Ivan Glasenberg has criticised competitors such as Anglo-Australian BHP Billiton (BHP.AX) (BLT.L) and Rio Tinto (RIO.L) (RIO.AX) several times for flooding the market with new, low-cost, iron ore supply which critics says has sent prices into a downward spiral. “The mining sector is suffering a crisis of confidence,” he said in a presentation at an investor conference in Barcelona. “Oversupplying markets regardless of demand is damaging the credibility of the industry,” He said mining had been the worst performing sector over the last twelve months, with commodity prices, share values and credit ratings all impacted. Investment flow has also weakened and was now about $60 billion below its 2012 peak, when the commodity supercycle turned sour, Glasenberg said. Iron ore, oil, nickel and thermal coal were the hardest hit commodities in the last year. Although Glencore does not have any meaningful exposure to iron ore, it is the world’s largest exporter of thermal coal and has … continue reading

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