Mine 2020

Resilient and resourceful: PwC’s 17th annual review of global trends in the mining industry

This year’s Top 40    

The Top 40 mining companies are so far weathering the COVID-19 storm mostly unscathed, and certainly better than many other sectors. A remarkable feat, given that global growth is expected to decline in 2020. 

The ability of the Top 40 to ‘resource the future’ continues to be relevant in the current environment as many governments will appreciate mining for being a bedrock of economic recovery out of this crisis.

Explore this year’s key trends shaping the mining industry

An event without precedent in living memory, the COVID-19 pandemic is challenging several long-held truths about mining. Many miners, some for the first time, are experiencing the downside of global supply chains, ultra-lean operations and specialisation. But the pandemic is also highlighting the sector’s resilience and the role that miners play in supporting communities and the broader economy.

The Top 40 have shown they can innovate, adapt and respond to this crisis along with the best. Now is a good time to assess which of those tactics were effective and should be codified to help miners prepare for future disruptive events.

The global economy is entering uncertain times following the COVID-19 outbreak, with the International Monetary Fund predicting a 3% contraction in the global economy for 2020. But the Top 40 are in an excellent position to weather the storm. On the back of a solid financial performance in 2019 and prudent capital expenditure, the world’s Top 40 miners face the crisis with strong balance sheets and the flexibility to respond.

It’s a bittersweet time for mining mergers and acquisitions. The Top 40 are better placed than most to do big deals but face an uncertain outlook and practical constraints. In this environment, miners may find value in doing smaller, high-quality deals closer to home. With strong balance sheets and adequate liquidity, the world’s Top 40 miners are in good shape to capitalise on deal opportunities this year.

Mining companies may think they’re an unlikely target for cyberattacks, but as reliance on autonomous and digital technology grows, so too does the cybersecurity risk. And the consequences can be a matter of life or death. Cybersecurity should be an integral part of the Top 40’s safety and business strategies. Mining companies are renowned for putting safety at the heart of everything they do. But with the growing risks associated with mining automation, cybersecurity also needs to be a core aspect of safety.

Big mining companies have a crucial role to play to protect the social licence of ‘brand mining.’ But our analysis shows that on the reporting front some are doing more of the heavy lifting than others. The Top 40 must work together to encourage greater transparency and accountability on ESG. Reporting on the areas that really matter to stakeholders, whether they be investors, customers, employees, governments or the community at large, is critical in telling mining’s ESG story. 

Looking ahead

In some respects, the mining sector is well-situated in the wake of COVID-19. But the longer-term impacts remain uncertain, and ongoing disruption is likely. Top 40 miners should take advantage of their current position of financial stability to revisit their strategies; consider a collective step up in ESG behaviours, metrics and reporting disciplines; and undertake a review of cyber risk within the broader remit of safety first. These measures will ensure their businesses can enhance their resilience over the long term and meet the demands of the global economy to maximise the opportunities to resource the post COVID-19 future.

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Sacha  Winzenried

Sacha Winzenried

Advisor, PwC Indonesia

Tel: +62 21 509 92901

Antonius  Sanyojaya

Antonius Sanyojaya

Partner, PwC Indonesia

Tel: +62 21 509 92901

Joshua R Wahyudi

Joshua R Wahyudi

Partner, PwC Indonesia

Tel: +62 21 509 92901

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