Mining companies saw moderate growth in 2010, and the forecast for 2011 is strong as global demand for base and precious metals continues to climb. Prices for these commodities are expected to rise with the demand increase. A return to growth has also seen a shift of focus to more non-traditional mining locations.
Despite these improvements, mining companies continue to face some major challenges for sustainable growth. A rise in demand, from the developing world in particular, has made performance improvement and cost savings key challenges within the industry. The rise of resource nationalism is of major concern to global mining companies. Miners are facing a political landscape that has become more intertwined with operations, resulting in a direct hit to bottom lines. Taxation has become an issue at the forefront of CEOs' minds. Mining companies are also contending with a shortage of skilled workers, particularly in developing markets.
Company transactions picked up dramatically in 2010, and the expectation for 2011 is for a large number of mining deals. There are a number of companies holding significant cash, looking for access to new reserves or expansion into new territories.
Improving safety and reducing the environmental impact will be ongoing goals for the mining industry. "Low-carbon" production of minerals will become increasingly important in the years to come.
PwC delivers a range of services to help mining companies address the many challenges they face today and to help them to prepare for the upturn in the future.