The Business of Mining

Deloitte: The top 10 issues mining companies will face in the coming year:

1. International investment fuels the sector
2. Volatility is the new normal
3. Engaging stakeholders takes centre stage
4. Political agendas to the force
5. You’ll need a long term plan
6. The war for talent rages on
7. Maintaining the search for that elusive pot of gold
8. Climate change disclosure and adaptation are getting harder
9. Inadequate infrastructure hampers growth
10. Exploring new revenue opportunities

Source: Deloitte – Tracking the Trends 2011

Ernst & Young: The top 10 business risks of 2011-2012:

1. Resource nationalism
2. Skills shortage
3. Infrastructure access
4. Maintaining a social licence to operate
5. Capital project execution
6. Price and currency volatility
7. Capital allocation
8. Cost management
9. Interruptions to supply
10. Fraud and corruption

Source: Ernst & Young – Business risks facing mining
and metals 2011–2012

PWC: Game changing trends:

• Mining companies have continued to outperform the overall market
• Market cap is (almost) back
• Undervalued industry? The Price to Earnings (P/E) multiple has declined in 2010
• During 2010 we saw BHP Billiton, Vale and Rio Tinto step clear of the rest of the industry
• Return on equity and return on capital employed lag despite record profits
• There has been a fundamental shift in the cost base of the industry.
• Operating cash flow returns, but investing lags

Source: PWC – Mine 2011