$34 breakout, page-17

plans to add yet more tonnes to the market have drawn widespread criticism. A vocal critic has been Ivan Glasenberg, the billionaire chief executive of commodities producer and trader Glencore (GLEN.LN). He has accused BHP Billiton and Rio Tinto of "killing the super-cycle" by adding to the iron ore glut. That said, having acknowledged an interest in acquiring Rio Tinto, it plays into Glencore's hands to talk down the iron ore price - and Rio Tinto's share price. However, Glasenberg is not a voice to be ignored when it comes to dealing with supply gluts. Glencore last week unveiled plans to suspend production at its Australian coal operations for three weeks. At $60 a tonne, thermal coal is fetching half what it did three years ago. Glencore's action will remove five million tonnes of output. What makes the move surprising is Glencore claims all the mines it is temporarily closing are profitable. Glasenberg has decided to show leadership by taking tonnes out of the market to support prices, rather than continuing to run his operations at full speed, add more supply to an oversupplied market, and hurt coal prices, and his bottom line, further. It's a lesson in resource economics that BHP Billiton and Rio Tinto may want to take on board. With earnings under pressure, there is no doubt shareholders may start asking why more tonnes are being mined and shipped. It's then a question of who may blink first in cutting supply. --- Email:[email protected] --- Comments? E-mail us at [email protected]Subscribe to WSJ: http://online.wsj.com?mod=djnwires (END) Dow Jones Newswires