JOHANNESBURG (miningweekly.com) – The global mining industry achieved average total shareholder returns (TSR) of 18% between 2001 and 2011, helped by capital stewardship, robust organic growth and a strong, credible outlook for value creation.
According to a report released on Thursday by business strategy adviser The Boston Consulting Group, revenue increases attributable to rising commodity prices accounted for nearly 14% of the total 18% TSR that the industry averaged.
The remaining 4% was the result of a combination of production gains, margin expansion and contributions from cash flow.
It added that the mining industry benefited from the continued economic expansion in emerging markets, which led to steadily rising commodity prices.
“Even more remarkable was the decade-long yearly average TSR of the industry’s top ten performers – a stunning 39%,” the company said on Thursday.
The report revealed the results of a study of 34 leading mining companies and calculated TSR as a product of multiple factors, including the combination of revenue growth and change in margins as an indicator of a company’s improvement in fundamental value.
Unlike their industry peers, the top ten mining companies continued to earn high TSRs during the second half of the decade – the period encompassing the global financial crisis.
The report’s top ten value creators for the period were Mexican miner Industrias Peñoles (average TSR of 58.2%), Grupo Mexico (49.5%), the UK’s Randgold Resources (45%), Canada’s First Quantum Minerals (42.7%), China’s Inner Mongolia Yitai Coal (40.2%), US miner Cliffs Natural Resources (40.1%), global diversified mining group Exxaro Resources (39.2%), Sociedad Químaca y Minera de Chile (36.9%), the UK’s Antofagasta (32.4%) and China’s Yanzhou Coal Mining (30.1%).