The debt crisis at Glencore (LSE: GLEN) piled burden upon burden on the beleaguered mining giant, which was already reeling from plummeting prices of many of the metals, minerals and other commodities in which it trades. And between April and September last year, its share price shed an astonishing 78%.

Seriously impressed

After remaining in the doldrums for the rest of 2015, since late January this year the shares have almost doubled, to 146p as I write. The main thrust has been Glencore’s impressive results from its debt-reduction programme. At the end of 2014, net debt stood at $30.5bn, and that had fallen a little to $29.6bn by June 2015. But then, in September, Glencore announced a plan to get the figure down closer to $20bn by the end of 2016, through a combination of equity issue, cost reductions and asset disposals.

At 2015 results time, things were looking better, with the end-2016 debt target reduced further to $17-18bn. And with $4-5bn of asset disposals planned for the year, that’s looking realistic. I’m actually seriously impressed by Glencore’s decisive actions, and I expect the shares to do well in the medium term when commodity prices firm up some more, especially as the company is so diverse. But I’m turned off at the moment because, with forecast P/E multiples still pretty high, I see risk of the share price falling back some. And even a reduced debt of $17-18bn is still a hefty sum.

Still on shaky ground

We’ve seen a bigger recent recovery at Anglo American (LSE: AAL), whose shares have climbed by 165% since late January, to 628p. There’s still a sizeable fall in earnings on the cards for this year, but analysts have a return to growth pencilled in for 2017, which would drop the P/E to a respectable 15. But even after that, the shares are still down 81% over a traumatic five-year period that has seen the company massively restructuring and slimming down, with the prospect of going bust having been a real possibility at one stage.

Anglo American’s ongoing cost-cutting is bearing fruit, but it did record a $5.5bn pre-tax loss for 2015. And with those results we heard of an “environment that has been deteriorating at a faster pace“, with the firm having to reach for further “detailed and wide-ranging measures to sustainably improve cash flows and materially reduce net debt“.

Anglo American is still struggling too much for me to be interested, and with sentiment swaying so wildly, I can see the company’s recovery and share price stabilization taking longer than many seem to think.

Big recovery to come?

And that brings me to my favourite of these picks, BHP Billiton (LSE: BLT). The shares are down 67% over five years, and while that’s not great, it’s the best performer of the three — though we’re looking at a relatively modest 34% gain since January’s low, to 803p. Like the others, BHP has been cutting costs and splitting off non-core assets, and at results time in February the firm switched to a new dividend policy of making “a minimum 50% payout of underlying attributable profit at every reporting period“, with the flexibility to pay extras as and when appropriate.

BHP had been one of the few still making decent dividend payments, with a yield of 3.4% forecast for the year to June 2016, and that really hasn’t been too sensible when balance sheets need to be strengthened. So that’s a good sign. The downside to BHP for me is debt, and with $25.9bn outstanding at December 2015, we’re looking at Glencore-style levels. Still, at least that was largely unchanged from a year earlier.

This year should be the crunch year for BHP, with a massive fall in EPS on the cards, but analysts expect  an equally dramatic recovery next year. It does put the shares on a June 2017 P/E of around 30, though it’s harder to make much sense of that with such dramatic earnings changes happening. I’m torn between BHP and Glencore, but I can’t help feeling that the apparently high P/E has put people off the former, and so BHP gets my nod — if only marginally.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.