Asset sales and capital returns made the world’s top two mining companies, BHP and Rio Tinto, investment stars until mid-year when trade-war tensions turned them into losers, but a six-month downturn could be ending with a possible re-start of the asset-selling process. Credit for the price rises was shared by strong profits in iron ore, the major business units of both BHP and Rio Tinto, along with heavy-duty asset disposals that included BHP selling its onshore U.S. oil and gas interests and Rio Tinto exiting the thermal (electricity generating) coal business. Because there have been few asset sales this year investors have tended to overlook the potential for capital returns from a fresh wave of disposals. “Understandably, the market’s focus on asset sales has diminished,” Jefferies said. The bank rates Rio Tinto a buy and BHP a hold.

Source: Forbes December 09, 2019 01:30 UTC