Tracking the trends 2010
A look at 10 of the top issues mining companies will face
In mining, as in life, nothing lasts forever.
Volatility seems a mild word to apply to what’s been happening in the mining sector over the past year. After reaching record highs in March 2008, metals prices collapsed in response to the global financial crisis, losing 41 percent of their value by mid-2009. Caught by surprise, many mining companies pushed cost management to the top of the corporate agenda and began cutting down across the board – shedding non-core (and, in some cases, high-quality) assets, halting production, scaling back work forces and putting deals on hold.
Just when much of the industry had settled in for a long flat stretch, commodity prices began to rebound. Bolstered by re-emerging demand from China and growth markets like India, along with government stimulus packages and an ongoing need to invest in infrastructure, the industry recovered much of its losses. Although new mine development remains a shaky proposition, producers are seeing a return to profitability. The question topmost on executives’ minds now is: how long will this one last?
Senior mining partners from Deloitte member firms around the world have collaborated on this report examining the issues facing mining companies in the coming year. Among these are contending with a changing climate, government regulation, elusive financing, volatile commodities prices, and more.