In the market for raw metals? Glencore PLC’s sprawling copper mine in the Chilean desert will set you back only $1 billion. Assuming you don’t mind a bit more of a splurge, how about Anglo American PLC’s iron ore mine in Brazil, which cost the company $14 billion to buy and build in the late 2000s? And if you’re more of a coal person, a string of mines are on the block across Australia.
It’s a buyer’s market in the global mining sector right now.
Plunging prices for minerals, metals and crude oil during the past year have hammered mining companies from Britain’s Anglo American and Switzerland’s Glencore to Australia’s BHP Billiton Ltd., Brazil’s Vale SA and the U.K.’s Rio Tinto PLC. Beset by climbing debts, deteriorating operating results and widening losses, the world’s mining giants are looking to boost their balance sheets by offloading costly assets.
Glencore said Tuesday it aims to sell between $4 billion and $5 billion in assets this year to cut some of its net debt of $25.9 billion. The mining and trading conglomerate lost almost $5 billion during 2015 as slower demand in China, supply gluts of key metals and the stronger U.S. dollar dragged down commodity prices.
Peter Archbold, head of basic materials at Fitch Ratings in London, said the number of assets for sale is climbing in part because of the cloudy outlook for China’s economic growth, a main driver of demand for copper, iron ore, nickel, oil and virtually any other material used in construction or manufacturing.
“Compared to previous downturns, there is numerically more assets for sale,” Archbold said. “There’s probably going to be a more extended downturn than in previous years because it’s related to the slowing of China, and that’s a bigger event.”
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