2015 was a race to the bottom with many new records set by the world’s 40 largest mining companies according to PwC’s annual Mine report.
The 13th release in PwC’s industry series analyzing financial performance and global trends reveals a first ever collective net loss for the Top 40 miners with market capitalisation falling by 37%, effectively wiping out all the gains made during the commodity super cycle.
There has been no shortage of analysis suggesting that late 2015 marked the bottom of the market. Sporadic rallies in early 2016 built expectations, with many pens poised to herald a gradual but sustained return to prosperity. However, most aspirations have since been snuffed, dismissed as unfortunate interpretations of increased volatility. Some industry leaders have taken the opportunity to reinforce their expectations of subdued conditions persisting through 2016 and beyond.
Canada, however, found itself in a better position that most as lithium emerged as a crowd favourite in 2015. It was cheered on by the acceleration of the battery boom, leaving no doubt that the energy landscape is changing and new world disruptors will have a role to play. Further strengthening Canada’s position comparatively was the strong performance of gold relative to other commodities in 2015.
But if there is one thing that 2015 has shown, it is that the foundation cannot be as dependent on China.While China is still critical to the success of the industry, accounting for approximately 40% of overall commodity demand, it can no longer be relied on to supercharge returns. As the country moves from a manufacturing based economy to a services-based economy the previously rampant demand for commodities will not resume with the same intensity.
Has the industry finally reached a turning point, and where will it go from here? Read the full report to learn more.