I began this year by forecasting that 2015 would be defined much more by carnage in big miners rather than small which were last year’s story. Moreover, I argued that when the big miners finally crashed, it would herald the approach of the great Australian recession.
BHP is well on its way to near-complete shareholder destruction. But RIO has held up better than it should have all year, so far down 21%, owing to its dividend and buyback. Now, that appears to breaking down.
RIO is basically an iron ore play plus change and it’s iron ore margins have shrunk now to the low teens:
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