Glencore Swings to $5 Billion Loss but CEO Optimistic – by Scott Patterson and Alex MacDonald (Wall Street Journal – March 1, 2016)

http://www.wsj.com/

LONDON—Swiss commodities giant Glencore PLC said it lost almost $5 billion in 2015, among its worst-ever performances, but Chief Executive Ivan Glasenberg sounded a rare note of optimism for a mining industry racked by a prolonged price slump.

“Have we bottomed? I think so,” Mr. Glasenberg said on a call with reporters Tuesday.

Mr. Glasenberg’s upbeat remarks run counter to some other mining executives, who have said they continue to expect more pain in 2016. Glencore’s results put an exclamation mark on a dismal 2015 for which $32 billion of losses were reported by the world’s five largest independent miners—Glencore, BHP Billiton Ltd., Rio Tinto PLC, Vale SA and Anglo American PLC.

Miners have been ravaged by an unexpectedly sharp downturn in demand growth in China after an endless stream of production from new operations launched during a China-fueled demand boom that started about a decade ago. In response, the companies have slashed spending, taken massive impairments and cut dividends, hoping to salvage their hemorrhaging balance sheets and stave off further ratings downgrades.

Mr. Glasenberg said he was optimistic that 2016 wouldn’t be a repeat of 2015. He cited solid demand for Glencore’s products world-wide and sharp spending cutbacks among large mining companies, including his own.

Glencore has slashed spending and production at its coal, copper and zinc mines. The copper cuts have taken about 300,000 metric tons of annualized production out of the market, Mr. Glasenberg said.

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