Now I’ve seen it all:
Rio Tinto is the latest resources company to be the subject of takeover speculation involving Switzerland’s Glencore.
…“The biggest issue now facing the mining industry is not so much operational as strategic. And we believe that some of the most important strategic challenges are those currently faced by Rio Tinto.”
…“If the price recovers (as we expect) it will, of course, strengthen Rio Tinto’s position,” Mr Gait says.
“If it continues to decline then it will be painfully clear that their strategy of volume over price has failed. In which case a new approach will manifestly be needed.
The argument is that Glencore’s coal, nickel and copper will bring greater diversification for shareholders. True enough! But if Glencore is mad enough to buy it at the top of the global business cycle then it deserves everything it gets.
