Publications

PricewaterhouseCoopers' annual financial review of global mining industry featuring special stories on mining industry issues and innovative solutions.

This edition of Global mine bulletin highlights a number of reports and surveys recently issued by the PricewaterhouseCoopers global mining team.

The first ever Total tax contribution study for the global mining sector reveals the total taxes of fourteen of the world’s largest mining companies, focusing on their largest operations in a variety of countries.

After the rise comes the fall. The mining industry experienced a violent downward tailspin in the last three months of 2008 which has turned much of the deal-making in the sector upside down. We examine both the rationale behind the overall trends and look at the key individual deals. We look at the year under review, the context of the preceding three years, and ahead to the future direction of deal-making in the sector.

Coal has long been used as an energy resource traditionally for heating and power generation. However the dynamics and opportunity set for utilising coal is changing. There is increasing convergence and competition amongst different value-chains which means coal may have a more diverse role to play in the energy mix going forward. The climate change agenda and uncertain long term price expectations are causing a re-examination of extraction,production, transportation and end-user markets across a range of fuels. In our briefing paper, we describe the alternative methods for creating value from coal assets, with particular focus on coal bed methane and coal to gas technologies.

PricewaterhouseCoopers presents our second edition of Review of trends in the TSX-V mining industry, which examines the top 100 mining companies on the TSX Venture Exchange.

2008 has been a strong year for gold. The price started the year at US$846 on January 2 and averaged over US$800. There was significant intra-period volatility in the gold price over the year with prices ranging between US$712 and peaking at US$905 in September. In early December, when this report was written, prices have retreated to US$764.

It is difficult to comprehend the change the mining world has been through in the last few months. Liquidity and the credit crunch in the western world are certainly part of the reason; however, the slow down in demand from China has been an equally important aspect.

This review, the fourth annual report on the UK listed junior mining industry, provides an insight into the aggregated performance of the junior mining industry, as represented by 50 of the largest mining companies on the Alternative Investment Market (AIM).  The mining companies included in the report represent over 85% of the AIM mining industry by market capitalisation, and so Junior mine provides a good indicator of the health of the UK’s junior mining industry.

Our most recent report by PricewaterhouseCoopers, Mine: As good as it gets?, shows that while revenues of the top 40 mining companies grew by 32% in 2007, costs increased by 38%, thereby reducing margins. The fifth annual report provides a comprehensive analysis of the financial performance and position of the global mining industry and also discusses current trends in the global mining industry.

Delivering major capital projects on schedule and to budget is an increasingly difficult challenge for many mining companies. In 2005, PricewaterhouseCoopers’ global review of major capital projects in the mining industry found that only 2.5 percent of projects could be defined as successful when assessed across the four critical dimensions of: scope, cost, schedule and business benefits. Several of Australia’s coal mining companies, however, have robust capital project management processes in place. Some of these organisations have moved further to the forefront of world’s best practice over the past few years as they look to manage larger project portfolios in a time of volatile market conditions. This paper highlights Australian coal mining industry best practices in various areas of major capital project management.

A recent review of safety performance in the global mining industry found that Australia has one of the lowest mining fatality rates in the world. These results have been driven by considerable improvements in safety procedures and in the risk management techniques used to identify, measure and address safety hazards.

PwC believes that further progress can be achieved by improving the processes involved in capturing, analysing and sharing safety data. We have published this paper that demonstrates that greater excellence in safety reporting is the first step on this journey, and that this can be achieved by addressing 12 improvement opportunities in three main areas.

This edition of Global mine bulletin has a strong Australia focus with the country focus talking about the proposed Carbon Pollution Reduction Scheme which will be a major challenge to the mining sector. We also take a look at “Aussie Mine”, a summary of the mid tier and junior Australian mining industry which was released in June. This was the third of the trilogy; following Junior mine publications covering Toronto and the London AIM market. As with the other publications, 2007 was a wonderful year, however, there can be little doubt that 2008 will be far more testing.

Events provided a perfect backdrop for the release of our inaugural Mining deals publication. This document, which is the subject of the first story in this newsletter, examines the deals announced and completed in 2007 and compares them to 2006 and 2005. It will be no surprise that 2007 saw a record number of deals and a record value for deals. Indeed we also saw the largest ever transaction when Rio Tinto bought Alcan. The outlook for 2008 is even brighter, and there is every reason to believe that the records set in 2007 will be surpassed.

Global mine bulletin is a quarterly publication discussing trends and issues in the mining sector. In this edition, the impact that the sub-prime crisis will have on the mining industry is discussed, as well as performance improvement in the area of management reporting. PwC's new acquisition of GEM, an Australian-based consultancy focussing on strategy, operating effectiveness and profit maximisation in the mining industry is introduced in this newsletter.

We are pleased to once again present our comparison of effective income tax rates in the global mining industry.

Guide to the principal issues and challenges faced by new and existing MLPs

This edition describes the financial reporting implications of IFRS across a number of areas selected for their particular relevance to the mining industry.

Real time highlights some of the key areas of difficulty that impact specifically on the mining sector under IFRS. It provides insight into how companies have dealt with these issues, through examples of the accounting policies included in their published IFRS financial statements.