JOHANNESBURG (miningweekly.com) – Fewer than half of senior metals executives responding to KPMG International’s 2016 Global Metals & Mining Outlook survey voiced any level of confidence in the prospects for the global economy over the next two years.
This was particularly concerning given the tight relationship between the fortunes of the global economy and that of the global metals and mining industry, the advisory firm says.
However, while confidence in the global economy is low, the KPMG survey suggests that most metals executives believe they can survive and maybe even grow in the medium term.
Almost two-thirds of participants say they are confident of achieving growth in the next two years and 63% believe the industry will achieve a measure of growth over the same period.
“When growth does return, the market will likely be significantly different than in the past, particularly given the structural changes taking place and the environmental regulations currently being tabled around the world.
“You can’t just batten down the hatches and wait for the storm to pass, and this explains why these executives are making the best of a difficult situation,” said KPMG global mining head Jacques Erasmus.
Accordingly, 77% of the survey respondents say that cost and performance management are high priorities for the future and, having invested heavily in new capacity during the upcycle, many metals and mining operations are now keenly searching for new growth opportunities to help absorb some of their spare production capacity – 71% say that growth will be a high or an extremely high priority over the next two years.
GROWTH OPPORTUNITIES
When asked what participants will do to drive growth in today’s economy, respondents cite two main strategies: growing their existing market share and entering into new markets.
In part, the survey suggests a pullback from previously 'hot' emerging markets; 33% of those metals organisations with existing investments in Africa say they will likely reduce their investments over the coming years.
One in five of those currently operating in the Association of Southeast Asian Nations region also expect to pull back somewhat. Yet, at the same time, the survey shows that metals organisations are refocusing their investments into driving growth within their larger markets, China and the Americas in particular.
TAPPING INTO TECHNOLOGY
The KPMG survey also shows that metals executives plan to channel significant investment towards developing and implementing new manufacturing technologies aimed at driving efficiency and improving performance.
Just over a quarter of respondents say they have already invested in additive manufacturing and three-dimensional printing and an additional 27% say they will invest more in such technologies in future.
One-in-six say they have already invested into artificial intelligence and cognitive computing solutions, while 32% say they will certainly invest more in these areas.
However, the greatest focus for investment is in robotics, with 42% of respondents saying they will invest in this area over the next two years.