South32: Commodity price bust not over

Thursday 2 June 2016

Hat’s off to this gent, from the FT:

South32, the mining group split off from BHP Billiton last year, is warning that there is worse to come for the resources sector and that a recent jump in the prices of some commodities would be short lived.
“I am not convinced we are through the challenging price environment. I’m sure there is still more pain to come,” said Graham Kerr, chief executive, on Thursday.

He made the gloomy assessment as South32 confirmed it would cut 270 more jobs on top of the 1,750 already announced in February. Mr Kerr also said South32 was weighing shutting its Cerro Matoso ferronickel mine in Colombia, one of the world’s biggest, where workers are threatening to strike over pay and conditions.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.