Mine 2011: The game has changed

 

Last year we highlighted the growing optimism in the mining industry that was driving the industry back to boom times. The 2010 results have delivered on this expectation, but it is clear that the mining industry has entered a new era.

 

Despite cautious optimism, the results of the of the top 40 mining companies (by market capitalisation) were spectacular:

  • Revenues increased 32% - going past $400 billion for the first time
  • Net profit was up 156% to $110 billion
  • Operating cash flows grew 59%, leaving more than $100 billion cash on hand at year end
  • Total assets approached $1 trillion
  • Net debt reduced to $46 billion, resulting in gearing of only 8%

 

Looking to the future, growing demand for products, led by the emerging markets, will drive the industry and supply will be the most significant challenge the industry will face: the need to explore more remote locations and therefore create greater project complexity.

 

To keep up with demand, the Top 40 mining companies have announced more than $300 billion of capital programs with over $120 billion planned for 2011, more than double the total in 2010. While not all will be completed, the sheer size and volume of the announced projects demonstrates an industry where fulfilling seemingly insatiable demand is the top priority