Glencore’s Glasenberg slams top iron ore producers once again
Glencore’s (LON:GLEN) chief executive Ivan Glasenberg is not very fond of the top three iron producers' — Vale, BHP and Rio Tinto— ongoing strategy of ramping up production despite the commodity's price slump and he doesn’t waste any opportunity to express his disapproval.
Speaking to investors at a London presentation Wednesday he once again condemned the industry for its over-investment in certain commodities, adding his company was quite “fortunate” to not produce iron ore.
What Glasenberg seems to forget is that the company he leads would have had a major stake in the global seaborne market by now had Rio Tinto not rebuffed his takeover approach in July this year.
"We don't want to oversupply and cannibalize our own business," he said. "We will continue our disciplined approach to capital allocation … This will provide us with numerous options for delivering ongoing value for shareholders."
He was also quick to dismiss attacks against his company for adding to the glut in the thermal coal market.
“With coal, we’ve been accused of increasing supply and affecting the market. But over the past two years we’ve only added 17m tonnes [to a 950m tonne market] and a lot of that was inherited [with the takeover of Xstrata],” he said.
Retaining cash returns focus
The Swiss miner and commodity trader also revealed it is planning to return excess capital to shareholders via dividends, share buybacks and/or other special distributions.
“We are not going to hoard cash for the sake of hoarding cash or we’re not going to buy something for the sake of having a bigger company,” Glasenberg added. “We’re going to do what is best to do with that cash. If we can’t deploy it in our business at a return that makes sense we will give it back to shareholders.”
Glencore’s shares began today’s trading session on positive note, falling slightly by 02:08 pm GMT from 313.15p earlier in the day to 308.95p. According to Financial Times, the consensus forecast amongst 49 polled investment analysts covering Glencore as of last week is that that the firm will outperform the market.