Mining Industry
- Overall, market performance declined by $156 billion owing to lower commodity prices
- The cash flow has again reached a positive mark of $24 billion. Net profits decreased by 9 per cent
- Capital spending declined for the first time since 2010 and continues to decline
- Dividend income has reached an unprecedented 5 per cent high
- Many market players feel the impact of lower prices. However, there is a growing level of government intervention in industry and a growing number of conflicts based on strategic differences
It was expected that 2014 would be a difficult year for the global mining industry because of declining commodity prices and increased short-term volatility. The position of the 40 largest mining companies was initially mixed. Now, industry players will have to forget the ceremonies and fight the " no gloves " : the results of the annual PwC report " The mining industry " show that the industry will have to face an increase in government intervention, internal conflicts among market participants, and increased shareholders ' activity.
Eugenia Orlovsky, PwC partner in Russia, head of the practice of providing advisory services to metallurgical and mining companies in Russia:
" Since the publication of the report a year ago, Russian mining companies, Noril nickel, Polius Zoloto, ALROSA, have maintained their position in the global Top-40 capitalization rating, while the Uralkalia has lost some position on the disposal of a number of production facilities. This confirms the resilience of the Russian mining sector to the recession in the domestic market, when unfavourable macroeconomic conditions were partially offset by increased competitiveness in global markets through the devaluation of the rubles. Russian companies, as well as their international competitors, continue to improve operational efficiency and reduce costs, which, as in the past year, remains a critical priority for shareholders and top management. Given that the effect of devaluation would gradually deteriorate, Russian companies now have rare windows of opportunity to improve their long-term competitive positions.
