Tokyo, Japan-headquartered securities broker, Osprey Associates believes that shares of companies in the beleaguered mining sector could be worth consideration by investors looking for bargains in US and European equity markets that are looking increasingly expansive.

Beaten down names like Glencore, Anglo American and BHP Billiton have endured fierce selling pressure as the glut in commodities shows little sign of abating. Data emerging from China, the world’s largest user of raw materials like iron ore and copper, is indicating that the pace of the country’s economic slowdown is decreasing but even if the pace of economic growth picks up again, it is unlikely that its appetite for commodities will return to the heady heights of a few years ago.

James Conroy, chief economist at Osprey Associates said, however, that there was evidence to suggest that, with production of raw materials falling, the glut would eventually end.

“Mining stocks listed on London’s FTSE 100 have fallen by as much as 50% this year and acted as a drag on the overall exchange’s performance but with companies like Rio Tinto and Glencore downsizing operations, cutting production and slashing costs, it won’t be too long before their shares begin to recover. ” he added.

Anglo American announced earlier this week that it intended to reduce its workforce by a massive 85,000 jobs in a huge restructuring aimed at keeping the company profitable. Glencore, the Anglo Swiss mining and commodity trading group has been offloading key assets in a bid to reduce its huge debt mountain but Osprey Associates warns that investors should not expect an immediate turnaround in their fortunes.

“These are definitely medium to long-term purchases,” concluded Conroy.

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