Mining’s ‘Cash Machine’ Promise Fades as Prices Crater
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BHP Billiton Ltd. and Rio Tinto Group run the risk of taking on additional debt as a plunge in commodity prices threatens their ability to keep a promise of returning more cash to shareholders.
As the world’s two biggest mining companies reiterate pledges to bolster returns, a near five-year low in iron ore and coal prices raises the specter both will need to borrow to meet their dividend commitments. Along with rivals Glencore Plc and Vale SA, the two companies are largely responsible for the supply glut that’s putting downward pressure on prices.