Mine 2020

Canadian miners: Resilient and resourceful

At a glance

  • 2019 was a strong year for the largest mining companies in Canada and around the world, with the six Canadian miners on the global top 40 entering 2020 on a solid financial foundation.

  • While the COVID-19 pandemic will impact the financial outlook for 2020, the resilience of mining companies has helped them manage through the crisis relatively well.

  • Miners can emerge even stronger from the crisis through strategies that address ESG performance, cybersecurity gaps, digital transformation and potential deal opportunities. 


Canadian mining companies played a key role in delivering another successful year for the world’s largest miners in 2019, helping the industry enter a challenging 2020 from a position of strength.

For the period ended Dec. 31, 2019, revenues for the world’s 40 largest mining companies by market capitalization rose 4%, to US$692 billion. Earnings before interest, taxes, depreciation and amortization (EBITDA) were flat at $US168 billion, while dividends paid rose 25% and market capitalization was up 19% to US$898 billion. Global mining companies entered the COVID-19 crisis with strong balance sheets and improved liquidity.

Similar to last year, six Canadian companies made the top 40 list. The six companies reported a net profit margin of 19%, versus 9% for the global top 40. With a relatively healthy gearing ratio of 21%—versus 31% for the global top 40—the Canadian companies demonstrated their solid financial foundation.

Gold miners dominated Canada’s presence on the list, with four of the Canadian companies focused on that sector. Among the notable moves was Kinross Gold Corp. (No. 40), which returned to the top 40 for the first time in several years after reporting increased revenues, earnings and margins in its 2019 results. Topping the list of Canadian companies was Barrick Gold Corp., which ranked ninth (up from 11th in 2018), while Agnico Eagle Mines Ltd. saw the largest jump, rising to 17th from 24th in 2018. Agnico Eagle benefited from higher gold sales volumes as two new deposits in Nunavut came into commercial production in 2019.

Financial outlook for the top 40


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Source: Mine 2020 Resilient and resourceful. All figures reported in US dollars ($)

The strong performance of Canada's largest mining companies in 2019 speaks to their continued progress in recent years. While 2020 will be challenging, miners’ resilience during COVID-19 should help them manage through the coming months and position them to make investments needed for long-term success.

Kevin Chan, National Mining Leader, PwC Canada

Weathering the COVID-19 storm

The positive results in 2019 put the mining industry in a good position to be resilient in the face of the COVID-19 pandemic. As a whole, the six Canadian companies reported a significant rise in their market capitalization, showing their success in rebuilding investor interest. Global mining companies raised capital expenditures by 11%, reflecting efforts to position themselves for long-term growth.

While we expect 2020 to be challenging, miners have generally weathered the COVID-19 storm quite well. In Canada and many other countries, mines have largely continued to operate, demonstrating their essential role in the economy and companies’ proactive efforts to build trust with local communities. 

The resilience shown by miners will be critical to addressing the challenges and opportunities ahead. They include doing more to deal with cybersecurity threats and making environmental, social and governance (ESG) factors a top priority. For Canadian miners, mergers and acquisitions continue to offer opportunities to attract capital and help companies emerge stronger from this challenging period. We explore these challenges and opportunities in further detail below.

Addressing the mining industry’s cybersecurity blind spot

Our 2020 CEO Survey showed the mining industry has a potential blind spot around cybersecurity. Just 57% of global mining and metals CEOs expressed concern about cyber threats, with 12% extremely concerned. Across all industries surveyed, 73% were concerned (33% extremely so). Mining and metals CEOs also tended to cite external factors, such as rising public concern over privacy issues, as their top cybersecurity considerations.

The lower levels of concern may be a reflection of mining CEOs’ confidence in their cybersecurity controls and processes. But there are other factors to consider. The focus on public concerns over privacy issues, for example, may be due to some of the privacy breaches Canadian mining companies have faced. And given that mining companies don’t collect customer data in the same way as other organizations, they may view cybersecurity risks as a lower priority. Another factor is the cyclical nature of the industry, which can lead companies to reduce cybersecurity investments during periods of uncertainty.

Mining companies shouldn’t underestimate the threat. As they embrace automation and connected operational technologies (OT) at mine sites, they’re also exposing themselves to vulnerabilities, especially since these OT systems are connected to their corporate networks. These systems may control critical infrastructure, which means an attack can have severe consequences.

The risks have only grown during the pandemic. In recent months, we’ve seen an exponential rise in cyber threats, a situation we expect to put a strain on all organizations over the next year.

What should mining companies do? A key step is to adopt a comprehensive cyber risk management program that addresses specific risks and includes a tested cyber-incident response plan. For miners making OT investments, it’s important to understand the new threats this will introduce and deal with security concerns from the start.

Making ESG a core priority

As we explored in our report on British Columbia’s mining industry, strong ESG practices aren’t just good for people and the planet, but they can also help miners’ bottom lines and increase resilience. On the social side, for example, Canadian miners’ strong track records on community engagement have been critical to securing the social licence to continue operating during the COVID-19 pandemic.

Global mining and metals CEOs increasingly recognize the advantages of a strong ESG performance, with 72% of those participating in our CEO Survey agreeing their response to climate change initiatives will give their organization a reputational advantage with key stakeholders. This includes investors, for whom ESG performance is becoming a leading guidepost for investment decisions.

Canadian companies have taken action. Teck Resources Ltd., for example, has committed to being carbon neutral across all of its activities and operations by 2050. But while miners have been embracing one standard or another, announcing projects and reporting their progress, our global report found only 11 of the top 40 companies are doing enough to truly prioritize ESG matters by setting public commitments and targets, reporting consistently against them and linking executive and management performance to achieving them. Two of those 11 companies are Canadian miners.

Canadian miners have excellent track records around holding management accountable for health and safety performance, but it’s time to apply this across the ESG spectrum. For Canadian miners, we see reporting on ESG performance and having credible assurance over metrics as particularly important areas of focus. Miners should also look at developing a global ESG standard for the industry. While Canada’s industry has already done significant work on responsible mining, all companies would benefit from the clarity a global standard would bring.

Diversify through deals

If 2018 marked the return of the mega deal for gold miners, 2019 only deepened the resurgence. Of five mega deals noted in our global report, four involved Canadian companies, the largest being Newmont Corp.’s acquisition of Goldcorp Inc. and Kirkland Lake Gold Ltd.’s purchase of Detour Gold Corp. Even as mega-deal activity slowed recently, the largest transaction so far in 2020 also involved two Canadian-listed companies: SSR Mining Inc.’s proposed US$2.4-billion merger with Alacer Gold Corp.

We don’t expect as much activity in 2020, since many companies will likely look to conserve cash and the economic environment makes valuations more challenging. We still see a place for deals to help miners build resilience, particularly through smaller transactions that help companies increase their capital markets profile and attract investor interest. We’ve seen some gold companies entering into these types of deals this year, often through zero-premium transactions.

These deals can also help companies reduce their reliance on a single asset or a particular geography, as is the case in the proposed SSR/Alacer combination, which will merge two companies with mines in four jurisdictions to create a diversified portfolio. Besides this larger transaction, several of the deals reached this year have involved junior mining companies.

Mega-deals over US$1 billion in 2019 and year-to-date 2020  2020 deals SSR Mining Inc.merger with Alacer Gold Corp.US$2.4 billion Anglo American acquisition of Sirius Minerals US$1.5 billion A-Properti acquisition of the Elgaugol Coal Project US$1.4 billion  2019 deals Newmont acquisition of Goldcorp Inc. US$13.1 billion Kirkland Lake acquisition of Detour Gold Corp. US$3.8 billion Zlijin Mining acquisition of Continental Gold US$1.3 billion Jiangxi Copper acquisition of 17.6% of First Quantum Minerals Ltd. US$1.1 billion Lundin Mining acquisition of Mineraçao Maraca Industria e Comércio S.A. US$1.O billion

Strategies to emerge stronger

These are just some of the strategies available to Canadian miners to emerge stronger from the current challenges. While Canadian operations have avoided some of the biggest impacts of the pandemic, miners still face challenges requiring them to be agile and adapt.

With many having shifted how they operate during the pandemic, for example, now is a good time to see which changes—such as remote working or other adjustments to workforce models—are worth continuing. It’s also a good time to explore opportunities to step up digital transformation efforts in both the back office and at mine sites to improve performance and make companies more resilient to a potential future crisis. 

Mining companies have a key advantage in challenging times: the cyclical nature of the industry means they’ve long had to be resourceful to get through periods of volatility. While they’ve made strides in recent years, they face more uncertainty. By prioritizing cybersecurity, embracing the ESG opportunity and finding the right deals, they can ensure a bright future ahead.

The global top 40 mining companies

Global production profile and external market drivers
Impact level of COVID-19 to April 2020 ­ (global share of mineral production) by country    Canada: Operations partially stopped (Nickel, 7%; Gold, 5%)  United States: Operations partially stopped (Gold, 6%; Copper, 7%; Coal, 9%)  Peru: Operations stopped (Copper, 12%)  Chile: Operations continued (Copper, 28%)  Brazil: Operations continued (Iron ore, 19%)  Argentina: Operations stopped  Democratic Republic of Congo: Operations continued (Copper, 7%)  South Africa: Operations stopped (Coal, 3%)  Russia: Operations continued (Nickel, 10%; Coal, 4%; Iron ore, 4%; Gold, 9%)  China: Operations partially stopped (Iron ore, 14%; Copper, 8%; Gold 13%; Coal, 46%)  India: Operations partially stopped (Iron ore, 8%; Coal, 10%)  Philippines: Operations stopped (Nickel, 16%)  Indonesia: Operations partially stopped (Coal, 7%; Nickel, 30%)  Australia: Operations continued (Gold, 10%; Nickel, 7%; Iron ore, 37%; Coal, 6%)  New Caledonia: Operations continued (Nickel, 8%)    Notes  *‘Operations continued’ signifies ‘no material or significant production interruptions’  Percentages reflect geographical split of production, ­ by commodity.  Source: USGS Mineral Commodity Summaries, 2020; ­ BP Statistical Review of World Energy, 1965–2018; PwC analysis

Contact us

Kevin Chan

Kevin Chan

Chief Inclusion & Diversity Officer and National Mining Leader, PwC Canada

Tel: +1 416 941 8321

Monica Banting

Monica Banting

Partner, Eastern Canada Mining Leader, PwC Canada

Tel: +1 416 941 8233

Mark Patterson

Mark Patterson

BC Mining Leader, PwC Canada

Tel: +1 604 806 7160

Maxime Guilbault

Maxime Guilbault

Quebec Mining and Metals Leader, PwC Canada

Tel: +1 514 205 5448

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