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Reuters: Big miners may be forced to speed asset sales as price drops loom

Jul. 26, 2016 10:23 AM ETGlencore plc (GLCNF) StockBHP, VALE, AAUKY, RIO, AAUKF, GLCNF, GLNCYBy: Carl Surran, SA News Editor1 Comment
  • Three of the world's top five miners will need to step up asset sales in this year's H2 to meet a $14B full-year target as they race to cut debt, Reuters reports.
  • Glencore (OTCPK:GLCNF, OTCPK:GLNCY), Anglo American (OTCQX:AAUKF, OTCPK:AAUKY) and Vale (NYSE:VALE) have $5.4B from asset sales, far short of their target, delaying efforts to reduce debt and improved their credit ratings.
  • Asset sales lost steam amid the H1 rebound in commodity prices, as iron ore and coal prices rallied ~30% and copper prices rose ~7%, easing the sense of urgency for sellers while bidders waited for the rallies to fizzle, but most analysts and investors expect prices to fall during H2, as iron ore, coal and copper markets remain oversupplied.
  • Vale, which hopes to sell up to $5B worth of assets this year, may come under more pressure as so far it has only fetched $269M from the sale of three iron ore carriers, while Glencore and Anglo appear to be more on track toward their respective goals of $4B-$5B and $3B in asset sales this year.
  • BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) are considered well placed to buy assets, with interest in copper, but both have been surprised at the high prices that copper assets have fetched so far.

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