Seeking Alpha

BHP and RIO are toning down massive capital expenditure plans in the face of questionable demand...

BHP and RIO are toning down massive capital expenditure plans in the face of questionable demand and rising costs going forward, and now appear to be listening to investors and directing some of those billions towards capital returns. Might American industrial names -  XLI -1.3%, CAT -2.1%, JOY -2.1% - feel the pain?
Comments (3)
  • This can be a double-edged sword: yes, demand is uncertain, but scaling back on capex can also have detrimental consequences, and I question just how much is going to be turned toward capital returns. Perhaps M&A is a better option.
    4 May 2012, 05:10 PM Reply Like
  • If the reduced CapEx is going to dividends then that's friggin stupid. Their are other reasons to reduce it, not to flood the world market with iron and depress prices for one, but there are other lines of investment they need to undertake to bring the company forward post-china iron high.
    4 May 2012, 05:35 PM Reply Like
  • Purchasing applicable commodities to meet future demand can support ether bigger margins or completive pricing. World population will not slow, demand will only grow. Bob
    5 May 2012, 04:10 PM Reply Like
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