Significantly lower debt levels and more streamlined operations have global miners flush with cash. The major producers — BHP, Glencore, Rio Tinto, and Anglo American generated combined free cash flow in 2018 of about $87-million a day.
Commodities giant Rio Tinto pledged US$5-billion in dividends with an additional US$1-billion stock buyback. BHP Billiton, whose results came out in June 2018, returned US$10.4-billion to its shareholders through the combination of an off-market buy-back and a special dividend. Equity analysts at SBG Securities, however, said in a research report that “hoarding cash is inefficient and unlikely, especially as profitability comes through from projects that are not currently delivering at full capacities like Minas Rio and Quellaveco”.We think that the company has a lot of good investment options in existing assets and though we prefer a cautious approach , we have no doubt that in two to five years the market will reward growth and punish those without.
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