Rio versus BHP boils down to investors’ choice of commodity (Daily Times – September 8, 2016)

LONDON: The backgrounds of the leaders of the world’s top mining companies illustrate the choice facing investors, with BHP Billiton’s chief executive having worked in the oil industry and Rio Tinto’s new boss more focused on copper.

After aggressive cost-cutting and asset sales to drive down debt, the two mining giants are positioning themselves to capture growth as commodity markets begin to recover from a crash that dented company balance sheets.

French-born Jean-Sebastien Jacques has led Rio only since July, while his counterpart at BHP, Scotsman Andrew Mackenzie, has been in place for the turbulent past three years.

Both men sang from the same songsheet when presenting financial results last month. They ruled out the reckless spending of the past that almost led to financial ruin and promised to be safe, boring and disciplined, buying assets only when the price was right and maintaining the focus on lowering costs.

Rio is widely regarded as the better pick, with more analysts rating it a “Buy” than BHP, according to Reuters data.

Rio has the advantage of having cut debt faster, while investors have also been put off BHP by a dam burst at an iron ore mine in Brazil last year that could lead to years of litigation.

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