Is Glencore facing a “Lehman moment”?

Mining firm Glencore faces huge debt problems as commodity prices fall

Glencore bulldozers in the Prodeco coal mine in Colombia

Glencore bulldozers in the Prodeco coal mine in Colombia

Shares in the Anglo-Swiss mining goliath Glencore tumbled to their lowest on record, falling by 30% as commodity prices have been slashed.

Analysts have said that shares in the company may become practically worthless as the firm battles huge debts.

Speaking to the BBC, Nigel Wilson, the chief executive for Legal & General, which is a shareholder in Glencore, said the mining company was facing a “quasi-Lehman moment”, alluding to the collapse of the American investment bank which precipitated the global economic crisis.

In Hong Kong, shares fell by 27% in trading earlier today, mirroring falls seen in London yesterday. Nonetheless, some confidence returned in the UK, with early trading seeing a rebound of over 8%.

Glencore currently faces debts £20bn, while metal prices are low. According to the BBC, copper, aluminium and nickel are all down by more than 25% compared with a year ago.

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