Glencore CEO says rivals pushing mining sector into confidence crisis
Glencore chief executive (LON:GLEN) Ivan Glasenberg said Tuesday companies that continue to expand exports into oversupplied markets are damaging the credibility of the mining industry, tipping it into a confidence crisis.
His comments, the most recent attack to rivals Rio Tinto, BHP Billiton and Vale over their iron ore strategy, come barely a day after Fortescue Metals Group (ASX:FMG) chief executive officer and founder Andrew “Twiggy” Forrest urged Australians to demand official intervention to stop the “damaging” and “reckless” expansion plans.
It also echoes Australian Treasurer Joe Hockey’s warning to the country’s big miners to whom he told the government was monitoring their export growth amid weak iron ore prices.
Speaking at a mining investment conference in Barcelona, Glasenberg said industry actors that ignored demand and market balance did so at their own risk. However, he noted every participant is paying the price.
He proceeded to illustrate the point with a series of slides, which highlighted how mining has been the worst performing sector over the last 12 months:
Investment flow has also weakened and was now about $60 billion below its 2012 peak, when the commodity super-cycle turned sour, Glasenberg said.
Last week, the feisty Glencore boss offered an economics lesson to rival CEOs, who — he said — seem to urgently need a better understanding of demand and supply.