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.

Mining challenges: How PwC can help you?

Financing and managing capital projects

  • PwC’s Global Mining group includes professionals across a broad range of technical skill sectors, including valuation, strategy, performance improvement, corporate finance, taxation and transactions. They also have extensive experience assisting mining companies with complex issues.

Mining transactions and industry consolidation

  • On the buy side, we help acquirers to identify potential targets, evaluate assets/companies, improve their M&A process and set post-close priorities.
  • On the sell side, we help clients identify assets for disposal, resolve carve-out issues, assess the quality of earnings, determine the impact of transition/removal issues, assist in the coordination and structure of the data room, and advise purchase agreements and closing.
  • For clients who are potential targets, our transaction specialists can prepare reviews on the client's own business in advance of any bid to provide insight into the strategic, operational, and financial vulnerability of the client and identify possible "white knights." We can also perform "dummy" assignments for companies that are exposed to a potential take-over bid.

Improving performance and operational effectiveness

  • PwC possesses significant knowledge in the areas of cost reduction, sourcing and shared services analysis, IT effectiveness, as well as crisis management to help companies improve performance and operational effectiveness. Our expertise combined with the hard data and benchmarking capability of our pre-eminent Global Best Practices™ tool, allows us to help companies achieve best in class performance.

Managing risk

  • Risk is about uncertainty around expected business outcomes e.g. the potential impact of a diverse array of events that may enhance or impede an organisation’s ability to achieve its identified business objectives. Risk can also be viewed as a hazard (the threat of adverse business outcomes) but also as opportunity (the possibility that opportunity is not adequately leveraged).

Addressing sustainability issues

  • Our sustainable business solutions team works with mining companies across the world to align corporate governance and non-financial management including operating systems and processes, performance reports and mechanisms to meet the needs and expectations of stakeholders.

Recruiting and retaining a skilled workforce

  • Our multi-disciplinary approach allows us to advise clients on all aspects of people management.

Contact us

Bojidar Neytchev

Bojidar Neytchev

Partner, Deals Services, PwC Serbia

Milivoje Nesovic

Milivoje Nesovic

Partner, Broader Assurance Services, PwC Serbia

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