Management consultants PwC have published another report about global trends in the mining industry.
Mine 2015 examines the 40 largest mining companies in the world.
Here are some tidbits. Those 40 companies as a group are market valued today at about $800 billion. That represents a halving of their value calculated four years ago.
The report has the interesting name “The gloves are off”.
Pone take away is the mining Shareholders are literally “ticked off” about the estimated $27 billion in corporate write offs because of poor investment decisions made by overly aggressive managers between 2006 and 2013.
Under pressure from shareholders, many of the top 40 companies cut capital spending 20% in 2014. Many of the so called greenfield projects are the ones taking the biggest hit. The company exploration budgets have been particularly cut.
Over the last 2 years, “the majors cut back their exploration spending by more than half to about $4.9 billion in 2014. The drop was from about $6.3 billion spent in 2013 and $12 billion spent in 2012. This is consistent with trends reported by multiple otyerbnewscsources.
The report makes note that the so called junior miners in this list of 40 has witnessed the worst in terms of their ability as a market group to raise greenfield exploration capital.
Obviously, many of the supporting rail and port projects have also been hurt, suspended, or dropped.
Contact PwC for more details.