Azernews.Az

By Bloomberg

Billionaire commodity trader Ivan Glasenberg is offering to teach his mining rivals the basics of economics.

The chief executive officer of Glencore Plc is pinning the blame for a slump in the value of the mining and trading company that listed four years ago at least in part on the failure of competing commodity producers to comprehend demand and supply.

“Unfortunately, our competitors, the world, have produced more supply than demand and commodity prices are down for that reason,” Glasenberg, 58, told an annual shareholder meeting in Zug, Switzerland. “I’m doing my level best to convince my competitors we should understand the words demand-supply.”

Hopefully, “less mines will be built to supply the market. That will have a beneficial effect on the commodity prices, which will evolve to benefit your share price,” he said, asked about Glencore stock’s performance by a shareholder.

Glencore’s market value in London has declined 43 percent since its $10 billion initial public offering four years ago.

It isn’t the first time Glasenberg criticized competitors for adding to a surplus in some markets. The Glencore veteran said in 2013 that mining chiefs had “screwed up” by swamping the world with raw materials. Six months later he was praising them for responding to market concerns and curbing expansion.

“He’s a hard guy to please,” BHP Billiton Ltd. CEO Andrew Mackenzie said at the time. BHP, Rio Tinto Group and Brazil’s Vale SA are the world’s three-biggest mining companies.

Glasenberg sees looming deficits in copper, zinc and nickel helping to underpin future profitability and enhanced returns. Glencore is the biggest exporter of coal used in power stations and has been expanding annual output, with increased production from operations in Africa and South America.