BHP CEO Wants Mining Rivals to Cut Loss-Making Output and FastBy
Mackenzie says some rivals are surviving longer than expected
BHP continues to review all operations for viability
BHP Billiton Ltd. Chief Executive Officer Andrew Mackenzie wants a faster response from some rivals of the world’s biggest mining company in shuttering unprofitable mines and smelters.
“It would be great if the top part of the cost-curve, because we’re not part of it, moved more quickly rather than hope that they could survive forever,” Mackenzie told reporters in London on Thursday. “It would be wonderful if there was more instant reaction. We know that people aim to survive. They do persist for longer than you expect and we have to plan accordingly and we do.”
Glencore Plc, the worst performer this year in the U.K.’s benchmark stock index, has scaled back zinc, copper and coal operations after slowing demand from top user China sent prices to the lowest in at least five years. Its billionaire Chief Executive Officer Ivan Glasenberg has became the flag-bearer for a commodities revival after cutting zinc production by a third, helping to spark one of the biggest metals rallies this year.
BHP has closed some unprofitable production of steel-making coal in Australia in recent years. Freeport-McMoRan Inc., the largest publicly traded copper supplier, said last week it may look to further reduce output amid falling prices.
“We continue to examine every operation, actually almost every sub-operation, to check on its viability in the medium term,” Mackenzie said. “It does happen, and it could happen again, but for now everything is performing at the level that we’ll maintain full production.”
BHP’s marketing chief last week shrugged off moves by rival producers including Glencore to trim production in a bid to lift sagging commodity prices. Closing unprofitable operations is “just a normal, rational economic decision,” Arnoud Balhuizen said.
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