The giants of the iron-ore industry have claimed their biggest victim yet: Anglo American Plc.
The 99-year-old mining company, reeling from a $5.6 billion loss last year, is pulling out of iron ore and Chief Executive Officer Mark Cutifani described a bleak outlook for the material. The exit marks the result of a strategy, employed by the world’s largest producers, of continuing to expand output in the face of plunging prices. BHP Billiton Ltd. has described the tactic as ‘‘squeezing the lemon.”
“We’ve watched competitors in iron ore flood the market,” Cutifani, who’s been at the helm of Anglo for three years, said in an interview with Bloomberg Television on Tuesday. “It will be tough on the supply side for some time.”
Anglo is considering selling its controlling stake in Kumba Iron Ore Ltd., Africa’s top producer. It may also exit Minas-Rio, one of the world’s largest mining projects and Anglo’s most expensive ever.
The company spent $14 billion to buy and build the Brazilian mine.
“That’s the one way not to make money in this game — buy high and sell low — which is sadly what they’ve done to perfection,” Ben Davis, a mining analyst at Liberum Capital Ltd. in London, said by phone.
For the rest of this article, click here: http://www.bloomberg.com/news/articles/2016-02-16/the-great-iron-ore-flood-claims-biggest-victim-in-anglo-american