BRISBANE, Australia—Australian mining companies, struggling amid a commodities slump, have found an unlikely money-spinner: beef.
The success of pastoral companies owned by miners including BHP Billiton Ltd. and Rio Tinto PLC has become an unusual bright spot amid a prolonged downturn in metals and minerals markets, where prices of iron ore and coal are returning to multiyear lows.
These companies, which rear steers on land earmarked for minerals exploration or on old mining ground in Australia, have benefited from a doubling of beef prices over the past two years, driven by global demand for protein and a drop in the number of cattle following a major drought in North America.
From the arid plains surrounding iron-ore mines in Australia’s Pilbara region to the scrubby hinterland near coal pits on the east coast, higher beef prices are giving these companies more money to invest in genetics or expanding their herds.
Glencore PLC is one of them. The company’s Colinta Holdings unit breeds cattle and runs roughly 50,000 head across almost 3 million acres in Australia.“It’s a boom time for people in our business,” said Gary Johncock, who has managed Colinta for more than 25 years. “We’re seeing what is certainly an abnormal set of circumstances in the market. I’ve never seen it before.”
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