Mine 2013: review of global trends in the mining industry

A confidence crisis

This publication provides an analysis of the 40 largest mining companies by market capitalisation and reveals the mining industry faces a confidence crisis. Confidence over whether costs can be controlled, return on capital will improve and commodity prices will not collapse. While 2012 saw mining stocks fall slightly, they fell nearly 20% in the first four months of 2013.

Regaining confidence depends on how the mining industry responds to its rising costs, increasingly volatile commodity prices and other challenges such as resource nationalism.

Despite this drop in confidence, it’s not all bad news. Production volumes and dividend yields are up and while prices have fallen, they have not crashed. China continues to be the industry’s most important customer. While Chinese growth rates are slowing down, they are coming from a bigger base, so future demand for commodities still looks healthy.