Glencore talks up BHP assets

By Dow Jones newswires

Although the company ordinarily disavows so-called greenfields — unbuilt projects requiring years of capital before they turn a profit — Simandou's mother lode of ore, judged by many mining investors to be among the world's best, could prove a strong draw, provided the country is able to finance the construction of a port and rail network. "If Guinea gets the infrastructure, it's interesting," Mr Glasenberg said.

In an interview with The Wall Street Journal on Wednesday, Mr Glasenberg and Chief Financial Officer Steven Kalmin rejected that notion. "We can achieve growth through opportunistic, bolt-on M&A," Mr Kalmin said, while highlighting Glencore's recent acquisition of African-focused oil producer Caracal Energy as an example of the type of deal that can quickly boost its output of a key commodity.

Glencore said Wednesday it would launch a $US1 billion ($1. 07bn) share buyback, a move executives said underscored the commodities giant's commitment to returning cash to shareholders rather than spending it on expensive growth projects. "Growth for growth's sake isn't for us," chief executive Ivan Glasenberg said.

Mr Glasenberg hinted that they could be a better fit with Glencore's mine-to-market business model. "There are some good assets, but they're non-core for BHP, they don't move the needle for them," Mr Glasenberg said. "They want, big, easy to run operations with a long life.

Read more here: Business Spectator


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