Global Mine Bulletin - January 2009

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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.

The challenge to us all from this is how we better understand the daily events in China such that we can see events like those of the last few months more clearly before they occur. At this stage, I’m afraid that I offer the question, yet not the response.

As half of the planet continues through its industrial revolution (ably led by China for the last 30 years), the long-term commodity needs suggest that market fundamentals are not being followed. Add to this the rapid supply side response to the current situation and it looks as though this “bust” period will exacerbate the next “boom” – the sooner this happens the better!

The impact of the credit crunch on mining companies is the first story in this Global Mine* Bulletin. Certainly, no one is immune from the impacts – with even BHP Billiton changing plans and dropping its potentially industry transforming Rio Tinto conditional offer. We will look more closely at 2008 mining transactions in the next Global Mine* Bulletin.

The Performance Improvement Corner this month highlights two recent reports issued by PwC, one with information on how to avoid cost blow-outs and lost time on capital projects and the second on the ability to improve safety performance through enhanced reporting.

I trust that you will find this issue informative and useful. I would be pleased to receive any comments or discussion on contents or feedback on areas you wish to have covered in future editions.

2009 promises to be an interesting and challenging year for the industry and I look forward to continued engagement with you as the world addresses the challenges arising from the global financial crisis.

Tim Goldsmith
Global mining leader
PricewaterhouseCoopers