Glencore boss blames iron ore top miners for share price fall
Glencore (LON:GLEN) outspoken chief executive Ivan Glasenberg blamed a decline in the company's share price on "external factors," including a fall in commodity prices, such as iron ore, caused by top miners BHP, Rio and Vale overproduction.
In a new and open critic to his rivals for flooding the market with raw materials, Glasenberg said they needed to understand the basics of demand and supply, adding he was doing all he could to get Glencore's shares back up.
"Unfortunately our competitors in the world have produced more supply than demand and commodity prices are down for that reason," Glasenberg was quoted as saying by Reuters at the company's annual meeting in Switzerland.
“The share price is also very important to us,” he added, noting Glencore had returned $9.3 billion to investors through dividends and share buybacks since its flotation. “That’s similar to the amount we raised in the IPO.”
The miner and commodity trader’s shares, which are up 2% this year, have lost about 5% of their value in the last 12 months and over 40% since first listed in 2011 on the London Stock Exchange.
Glencore sees looming deficits in copper, zinc and nickel helping to underpin future profitability and enhanced returns. The company expects copper supplies, which account for about 40% of its sales, to move into a "deficit" shortly, partly because of declining ore grades in South America.
Glasenberg is also optimistic about the future of coal, one of the company’s key commodities, which he thinks "looks good going forward,” as Indonesia exports taper off with the country consuming more coal domestically.
Last month he said governments would fail to implement measures to cut carbon emissions, such as forcing miners keep its reserves in the ground, adding that growing demand for cheap energy would secure demand for fossil fuels.