BHP and Rio Tinto Send Mixed Messages
Posted: 05/16/2012 12:00:00 AM EDT | 0
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Top level executives to BHP Billiton and Rio Tinto are sending mixed messages about the future of mining and China’s demand for resources.
On the one hand, the chief executive of BHP, Marius Kloppers, and its chairman, Jac Nasser are saying that whilst China will still help sustain long-term commodity prices, the economic boom is maturing. Commodity prices show that they’ve fallen from their height.
BHP has also decided to scrap their $US80 billion expansion plans which have sent shivers down the stock market.
On the other hand, we recently reported, Rio Tinto has announced it will continue to invest in automation, with almost half a billion to be spent in their key Pilbara operations. Whilst the difference in investment is different, the two company’s decisions to be public about this reveal uncertainty in the mining industry.
In recent days, the Greek/Eurozone crisis has intensified and China has shown reduced appetite for iron ore and other materials, driving mining stock prices down. The only bright side for Australian miners is the depreciating AUD which will make our exports cheaper.
So, we want to ask our members:
- Have we reached the peak of the mining boom?
- How do BHP and Rio Tinto’s decision reflect current sentiments?
- What will happen next with the local mining industry?
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And what are local miners doing in response to BHP and Rio’s decisions?
Leave your comments below and share this article if you want to spread the debate.
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Contributor:
Mining IQ Editorial |
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