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AKIPRESS.COM - Glencore Plc (GLEN)’s billionaire Chief Executive Officer, Ivan Glasenberg, underscored his belief in the longevity of the global commodities boom by beating his biggest rivals in handing out surplus cash to investors, Bloomberg reports.
Glencore, the third-largest miner by market value, today announced a $1 billion share buyback after first-half profit gained 8 percent on higher production. Investors in BHP Billiton Ltd. (BHP) sent the stock down the most in more than three years in London yesterday after the world’s biggest mining company chose to retain cash because of weaker commodity prices.
Global mining investors have been demanding greater returns following a period marked by failed acquisitions and spending on mine expansions that flooded metals markets. After a decade of explosive price gains fueled by Chinese demand, often defined as the commodities supercycle, mining companies are contending with slower growth by spurning mergers and cutting costs.
“The supercycle ain’t over, China is still buying, demand for commodities hasn’t tapered off, it’s even higher than it’s ever been,” Glasenberg said today in an interview. “The demand is pretty good. We’ll grow. We may do acquisitions where you’re not creating more supply in the market.”
The stock gained as much as 1.7 percent to 365 pence in London today and traded at 36 at 10:14 a.m. London time. It’s up 18 percent this year giving it a market value of about $80 billion.