[miningmx.com] – DIVERSIFIED mining shares fell under the whip reversing many of this week’s gains after BHP Billiton wrote down its US shale assets by $7.2bn raising fears it might follow this with a cut in the dividend.
“In straitened times valuations tumble and then eventually you have to bite the bullet and take a hit on your balance sheet,” City Index market analyst, Ken Odeluga, told Reuters.
“(It’s) the same toxic mix of indebtedness, being hit by weakening demand for their main (product) and of course the fact that many of them have not actually cut dividends,” Odeluga said.
By midday in London, BHP Billiton stock had fallen 5.8%, but Anglo American was the biggest faller, down 9.5%. Glencore, Antofagasta and Rio Tinto were down between about 4% and 6% with the FTSE 350 Mining index the top sectoral decliner, dropping 4.8%, said Reuters.
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