But that’s all over now. BHP Billiton (BHP), Rio Tinto (RIO) and Anglo American(AAUKY), all large global companies, have now removed the key managers "who did a less-than-perfect job" during the super cycle, he adds, citing poor capital allocation decisions.
"The order of the day is to get the business right-sized," he says. Put another way, that means there’ll be a smaller supply of metals and minerals hitting the world market in the medium term.
In case you forgot, lower supply when demand remains constant tends to mean higher prices.
The wake-up call to management is also leading companies to make business plans that do not depend on prices of minerals rising. That means simply that projects are being started with an eye to a sustainable return on capital rather than what Wickwire calls "chasing production for production’s sake," as happened often during the supercycle.