Going Home; Chinese Mining Companies Losing Billions Of Dollars As They Retreat – by Tim Treadgold (Forbes Magazine – January 14, 2016)

http://www.forbes.com/

Expansion has flipped to contraction for Chinese miners as the global commodities glut overwhelms demand and the ability of the mainly state-owned companies to pay.

From Africa to Australia there is evidence of retreat as mining projects are abandoned in a rush to go home which is almost as hectic as the rush to expand during the commodities boom.

The flip from expansion to contraction is likely to force heavy losses on the companies involved, especially when the time comes to write-down asset values.

But it is also costing foreign workers and foreign governments dearly as work ends especially in the once red-hot iron ore sector which is feeling the heat of a collapse in Chinese demand for steel caused by a slowdown in the construction industry.

Countries with big copper mining industries in a region of southern Africa dubbed the copper belt are also being hurt by mine closures.

Zambia is being especially hard hit because copper accounts for 70% of its foreign-currency earnings which have plunged as the price of copper has fallen by 55% over the past five years from $4.50 a pound to its latest price of $2/lb.

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