The $1.4 trillion collapse in the value of mining stocks since 2011 is poised to reshape the industry as all but the strongest companies are squeezed by the lowest commodity prices in six years. Speaking to Bloomberg, Simon Grenfell, Natixis’ Co-Head of Global Commodities, discusses how the rout in commodity prices, combined with a debt binge in the past decade by mine operators high on surging Chinese appetite for raw materials, has meant that even past titans of the industry are now trading at minnow valuations .
“There are going to be fantastic assets available at distressed prices over the next three to six months,” said Simon Grenfell. Indeed, those who haven’t got debt will reshape the industry, with 2016 seeing a shift in assets.
However, “there remains much uncertainty in the market with regards to where we are going to land in prices, so that may continue to delay a lot of company action”.
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