https://www.miningweekly.com

Mining capex downward trend to continue

9th December 2016

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

Font size: - +

Despite a modestly more buoyant outlook for key metal prices, mining capital expenditures (capex) are expected to continue on a downward slide over the next three years as miners seek further cost cuts and to improve operational margins, according to analysis by Fitch Group research arm BMI.

Capex has been in decline since 2012, with miners focusing on a strategy of retrenchment, project cancellations and divestment of high-cost assets to balance books and improve margins.

“We expect this trend to continue as miners will continue to pursue a strategy of greater capital and supply discipline, which will result in further capex cuts to rein in global supply,” analysts stated in a recent industry trend analysis.

They added, however, that cancellations and a retrenchment strategy would offer limited additional gains, prompting miners to increasingly focus on maximising revenue at existing assets and increasing efficiency overall.

This will be done by focusing on streamlining mine processes and targeting innovation to improve operational efficiency.

BMI states that capex will continue its decline, albeit at a far slower pace, as miners continue to pursue a strategy of greater capital and supply discipline in the years ahead.

There will not be a uniform capex trend as investment in metals, including tin, gold and zinc, will fare better than minerals such as coal and iron-ore, owing to a more resilient price recovery over the coming years, according to BMI. BMI’s analysts point out that the operating environment for miners has changed drastically in recent years and industry players have had to assess their strategies and investment plans. Since 2012, miners have struggled to cope with falling mineral prices and declining revenues.

Edited by Samantha Herbst
Creamer Media Deputy Editor

Article Enquiry

Email Article

Save Article

Feedback

To advertise email advertising@creamermedia.co.za or click here

Showroom

ABB Electrification
ABB Electrification

Electrifying the world in a safe, smart, and sustainable way, ABB Electrification is a global technology leader in electrical distribution and...

VISIT SHOWROOM 
Environmental Impact Management Services
Environmental Impact Management Services

EIMS is an independent specialised environmental consulting firm offering the full spectrum of environmental management services across all sectors...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.042 1.153s - 110pq - 2rq
Subscribe Now