It is an extraordinary fact that in just three years, 2011,
2012 and 2013, China used more cement than the United States
did in the 20th century, 6.6 billion tonnes compared with 4.4
billion, according to figures from the U.S. Geological Survey.
LONDON – “Why did nobody see it coming?” With this simple question, posed to Professor Luis Garicano of the London School of Economics in November 2008, Britain’s Queen Elizabeth famously summed up the layman’s astonishment that an obscure part of the derivatives universe could trigger a global financial crisis.
A similar question might be posed of the world’s miners right now. Having collectively bet the house on a commodities “supercycle” only to see the “super” part of that cycle dissolve in front of their eyes, they are now fighting the numerous fires engulfing their overstretched balance sheets.
They simply don’t appear to have seen it coming.
But then, if you believe Andrew Mackenzie, chief executive of BHP Billiton, they didn’t see the original boom coming either.
Speaking at the AFR Summit in Melbourne earlier this week, Mackenzie confessed that the economic rise of China earlier this century “happened at a scale and a pace we simply didn’t see coming.”
“Many (including BHP Billiton) were unprepared for what has been the greatest commodities boom of our time.”
Having failed to foresee the boom, they also failed to foresee the bust.
“While BHP Billiton anticipated emerging trends that signaled the end of the boom, we didn’t expect the scale and the speed with which it happened.”
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