Quarterly Briefing brings together the collective insights of EY’s global mining and metal team including market fundamentals, commodities updates, M&A trends and the latest in resource nationalism.
Mining and Metals Quarterly Briefing: June 2016
M&A and capital raising in mining & metals: 1Q 2016
M&A and capital raising in mining & metals
Make working capital work for you
Good Mining (International) Limited
Debt in the mining sector
Global mining and metals tax guides
Steel sector set to transform in 2015
Business risks in mining and metals 2015-2016
Mining & Metals
Mining the opportunities
With a strong but volatile outlook for the sector, the global mining and metals industry is focused on future growth through expanded production, without losing sight of operational efficiency and cost optimization. The sector is also faced with the increased challenges of changing expectations in the maintenance of its social license to operate, skills shortages, effectively executing capital projects and meeting government revenue expectations.
EY’s Global Mining & Metals Center brings together a worldwide team of professionals to help you achieve your potential. Based in Sydney, our team is dedicated to offering industry insight and coordinating a network of more than 2,200 mining and metals professionals in 150 countries, who will develop practical alternatives and provide tailored solutions to the issues you face.
Key issues in today’s mining and metals environment include:
- Business risks facing the mining and metals sector
Mining and metals businesses face risks that are becoming more extreme and more complex, with resource nationalism, skills shortage and infrastructure as the top three, and the newcomer being sharing the benefits.
While the demand outlook remains strong, the price peaks have passed and so there is a much greater imperative for mining and metals companies to remain nimble and sure-footed in how they manage these fast-changing risks.
- Productivity — adopting broad transformation
Productivity, on both a volume and cost basis, has been declining in the mining sector since 2000. The productivity decline has mostly been a conscious choice – mining companies pursued production and revenue growth during the boom period in commodity prices, and mines were developed to get product out as quickly as possible not as economically as possible.
Declines were across the productivity spectrum, including labor, capital and material, with a major contributing factor to the decline being the challenge of operating at scale.
EY believes that the problem cannot be solved through individual cost-cutting solutions; a broad, end-to-end business transformation is required to regain competitive advantage. We also believe that innovation and technology could be a productivity game changer, as R&D in the sector has fallen behind other comparable sectors.
In our series of insights papers we explore the transformations necessary to regain and improve productivity.
- Productivity in mining: now comes the hard part
- Productivity in labor: it is only a ceasefire
- Productivity in mining: A case for broad transformation
- Competing for growth in the steel sector
Growth in steelmaking capacity still exceeds demand, with significant over-capacity putting pressure on operators’ profitability. Significant challenges in today’s global steel sector include:
- A shift to emerging markets
- Growth in market volatility and margin pressure
- Lack of operational agility
- A need for business models to evolve
Discover the significant challenges for this sector, how steelmakers can compete for growth and the outlook for 2012.
- Resource nationalism
Resource nationalism has remained in the top risks facing mining and metals companies for the past five year as seems to be picking up pace as governments seek to transfer even more value from the mining and metals sector.
Many governments around the world have now gone beyond taxation in seeking a greater take from the sector, with a wave of requirements introduced such as mandated beneficiation, export levies and limits on foreign ownership.
We closely follow resource nationalism, how it affects our clients and steps mining and metals companies can take to respond to this risk.
- Unique issues faced by mining and metals companies applying IFRS
The refining IFRS series aims to examine the complex, but unique, issues faced by mining and metals companies applying IFRS. These issues will be considered in the context of recent and current developments in the global mining and metals market place.
Our Good Mining Guide is an illustrative set of consolidated financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), for Good Mining (International) Limited (Good Mining), a fictitious group of mining companies. Good Mining specifically focuses on IFRS issues and the relevant disclosures as they relate to the mining and metals sector.
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Mining Eye - London and Canadian
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View our series which examines the unique issues faced by mining and metals companies applying IFRS.