PWC Mining report - Realigning Expectations

The financial performance & position of the global mining industry

July 2014

“The need to realise sustainable productivity gains will be paramount to reaching the goal

of having mines for all stages of the cycle.”

PWC report 2013 was one of the toughest for mining: Top 40 mining companies reported record impairments, net profits declined 72% to a decade low and net debt increased by 42%, all leading to a reduction in value of 23% ($280 billion) at the year end.

Reducing headcount and expenditure might be effective in reducing cash costs in the near term, but long term sustainable gains depend on strong underlying improvements in the efficiency of operations. Accordingly, productivity has become one of the most important topics as the industry aims to restore and sustain shareholder value. Top 40 CEOs are focusing on having low cost and highly efficient mines capable of operating at all stages of the commodity cycle, although this is very much a work-in-progress. Stakeholders are watching to ensure that results were not simply achieved from deferring spending or achieving improved costs per unit in ways that are not sustainable. The next step is regaining investor confidence by growing profits, and ultimately shareholder value, proving that cost reductions and efficiency gains are sustainable.

Download the report as (pdf): 2014 PWC Mining report

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