Glencore reports $8.9-billion loss

There's more bad news for the local mining industry.

Two weeks ago, Vale reported its net profits sank 84 per cent in its second quarter compared to a year earlier.

Glencore reported on Aug. 20 an $8.9-billion loss in its first half, although that was mainly due to a a $7.7-billion writedown on the merger it finalized less than four months ago, according to an article from the Wall Street Journal.

Earlier this year, Glencore purchased Xstrata for US$29 billion, including its Sudbury operations. Glencore's Sudbury operations are now known as Sudbury Integrated Nickel Operations, a Glencore Company.

The size of the writedown is also related to weak commodity prices as China’s growth rates slow and the U.S. and European recoveries prove weak, according to the Globe and Mail.

Analysts note that commodities upturns and downturns can last years, sometimes decades.

Despite the asset writedown, Glencore CEO Ivan Glasenberg sounded optimistic on Aug. 20, predicting that the annual cost savings of merging the two companies would be “materially in excess” of the $500 million predicted by the company in May.