It has been another challenging year for the sector, and the Top 40 senior producers in particular. The prolonged downswing in commodity prices has forced companies to fight hard to implement various measures to improve free cash flow. In 2014, a major focus was on reducing costs, and we saw cost-reduction and efficiency efforts start to pay off. The Top 40 have been saying for a few years that they will reduce capital spending, and in 2014 they delivered. The pace of mergers and acquisitions slowed dramatically especially compared to 2011, when many commodity prices were at or near record highs. The Top 40 miners lost $156 billion, or about 16% of their combined market value, in 2014. The good news is that is only half of last year’s slide.
The general outlook for the global metals and mining market remains subdued due to the combination of a slower rate of global economic growth, particularly in emerging markets, and signs of an oversupply of several commodities, most notably iron ore and coal. Lower crude oil prices and a stronger US dollar are proving beneficial for miners by helping to lower operating costs. The uneven global economic recovery and divergent monetary policies continue to create uncertainty around medium-term supply and demand across the mining industry.
How will the industry grow in the months and years ahead? Read the report to learn more.
The Top 40 miners lost $156 billion, or about 16% of their combined market value, in 2014.