A year ago the major miners were boasting about the size of their capital expenditure pipelines. Suddenly, however, they have started talking about flexibility and prioritisation.
This week both Rio Tinto and BHP Billiton have given voice to that shift in tone. Rio’s Tom Albanese, in the country ahead of next week’s Australian annual meeting, has been making it clear to everyone from the prime minister down that Rio is re-thinking its investment program and is likely to stretch the timetable for its major new projects to lower risk.
BHP’s chief executive for aluminium, nickel and corporate development, Alberto Calderon, expressed very similar sentiments at an investment conference this week, saying that while BHP remained confident about the long-term growth outlook and the fundamentals of key commodities it would now sequence its projects to reduce risk and balance short-term and long-term returns.
The factors influencing the relatively new-found caution within the two big miners are both global and local.
China has slowed its growth rate significantly and the composition of its growth is steadily shifting from investment to consumption, changing the nature of its demand for commodities. At the same time a wave of new supply, which had been deferred by the financial crisis, is starting to enter a market that has been impacted by the continuing economic and financial instability in Europe and the anaemic state of the US economy.
Read More
Business Spectator
This week both Rio Tinto and BHP Billiton have given voice to that shift in tone. Rio’s Tom Albanese, in the country ahead of next week’s Australian annual meeting, has been making it clear to everyone from the prime minister down that Rio is re-thinking its investment program and is likely to stretch the timetable for its major new projects to lower risk.
BHP’s chief executive for aluminium, nickel and corporate development, Alberto Calderon, expressed very similar sentiments at an investment conference this week, saying that while BHP remained confident about the long-term growth outlook and the fundamentals of key commodities it would now sequence its projects to reduce risk and balance short-term and long-term returns.
The factors influencing the relatively new-found caution within the two big miners are both global and local.
China has slowed its growth rate significantly and the composition of its growth is steadily shifting from investment to consumption, changing the nature of its demand for commodities. At the same time a wave of new supply, which had been deferred by the financial crisis, is starting to enter a market that has been impacted by the continuing economic and financial instability in Europe and the anaemic state of the US economy.
Read More
Business Spectator
No comments:
Post a Comment