As rivals tend their bruises, Ivan Glasenberg in seeking to buy or build everything in sight
Only Vale matches Glencore’s stinginess when it comes to rewarding shareholders, and its capex budget is just a quarter of its highest levels
Sydney — The mining industry these days resembles that old cartoon about a person torn between prudence and temptation. On one shoulder, a white-clad angel is whispering about the virtues of capital discipline, shareholder value and generous dividends. On the other sits Glencore CEO Ivan Glasenberg, clad in red and promising to buy or build everything in sight. The reason for that contrast was laid out clearly at the start of a Glencore investor presentation Tuesday. Uniquely among its peers, Glencore derives a substantial slice of its earnings from trading commodities, rather than producing them. When mining is weak, marketing can take up the slack, and vice versa. Another way of thinking about this is that whereas BHP Billiton, Rio Tinto and Vale all saw a gap of more than $20bn between their record-high and record-low earnings half-years over the past decade, just $3bn separated Glencore’s peak and trough. In an industry that’s been characterised by boom and bust since the first ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.