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I mostly ignore consensus forecasts - eg. AGL/BIL etc. were BUY's since 2010. Put that in your pipe and smoke it. 

Also 1 company has been calling NPN a sell since R500 a share. 

Help me understand this drop of 87% since listing in 2001. Is it primarily because of the global financial crises, and therefore the whole sector is affected; or is it because of bad business deals by Gelncore itself?

Help me understand this drop of 87% since listing in 2001. Is it primarily because of the global financial crises, and therefore the whole sector is affected; or is it because of bad business deals by Gelncore itself?

Glencore used to make all its money through trading i.e. buy copper in Zambia, pay some people to get it transported cheaply and smoothly to Dar Es Salaam, pay some more people at the port, freight it to China using cheap freight options, and then sell it to a Chinese buyer for a huge profit margin. Along the way they would hedge the underlying price  of copper in the futures or options market i.e. they didn't really care about the underlying price. Traders like big volatility swings because it allows them to arbitrage on price, location and quality differentials. In that regard Glencore's assets were how much transport, refining, freight and other basis optionality they had, as well as how many people and contracts they could control in the value chain.

So things like Richards Bay Coal Export Allocation were very important. That is why they bought Optimum Coal i.e. they were prepared to lose money on the Eskom supply contract because export coal prices were high and they got a whole bucketload of export allocation optionality. Now that export prices are really low (even in Rand terms) that coal export allocation is worth far less and now the company is not prepared to lose money on their Eskom coal contract. I guess that's called having your cake and eating it whenever you like. Glencore repeated this type of low quality asset purchase many times as they expected the assets to give them trading optionality. Now that all of that trading optionality is effectively gone (thanks to low prices and margins) they are realising that having low quality, high cost mines is not really a good idea.

So all of that debt that was accumulated to buy these assets is weighing heavily on their balance sheet and the assets are having a hard time paying off the debt by themselves without the margins from trading. Plus there is a massive amount of working capital employed on existing physical and financial positions in the market, some of which could be very far out of the money. But you would think that a serious player like Glencore would "mark-to-market" all of their derivative positions and this should therefore be reflected in their results.

What's the latest on Glencore?