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Consultant’s 2011 Mining Reports

September 22, 2011 Comments off

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

©2011 | Wilfred Visser | thebusinessofmining.com

Free Consulting: Mining Industry Reports

December 7, 2010 3 comments

“While financing remains scarce, Asian buyers and sovereign wealth funds are increasingly closing the gap, sparking a surge in M&A activity. To expand supplies, companies are also looking at ways to access reserves from some of the world’s less hospitable regions. Amid this complexity, mining companies continue to contend with traditional issues—from securing a social licence to complying with more stringent government regulations. To respond to these industry trends, mining companies must continue to structure strategic plans that take the full measure of their global risks and opportunities into account.”

Source: Deloitte, December 1 2010

Observations:

  • Deloitte released its ‘Tracking the Trends 2011’ report this week, describing what the consultancy thinks will be the top issues mining companies will be facing next year. ‘managing international investments’, ‘coping with volatility’ and ‘ensuring the social license to operate’ top the list.
  • Most consultancies publish industry research reports to position themselves as experts in the industry. A search on the industry pages of the top consultancies reveals that the consultancies known as the ‘Big Five’ are much more productive in delivering valuable ‘free consulting’ than the more specialized strategy consultants.

Overview of consultancy’s mining industry reports:

The Big Five

Specialized Consultancies

  • AT Kearney: Focuses on the buying side of raw materials business. Released report on M&A in the Mining & Steel industry in January 2010.
  • Bain: No recent mining industry reports.
  • BCG: Focuses on steelmaking rather than mining. No mining industry reports published since 2007.
  • Booz: No recent mining industry reports.
  • McKinsey: Leverages its involvement in drafting the World Economic Forum’s Scenarios to 2030. No mining industry reports published since December 2008.
  • Roland Berger: No recent mining industry reports.

©2010 | Wilfred Visser | thebusinessofmining.com

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