In our latest report we found that 2015 was a race to the bottom with many new records set by the world's 40 largest mining companies including the first ever collective net loss and market capitalisation reduction of 37%.
2015 saw the first collective net loss in the Top 40’s history (US$27B)
Market capitalisation is down 37% negating all gains from the commodity super-cycle
High debt sees some miners fighting for survival through asset fire sales
2015 was a race to the bottom with many new records set by the world’s 40 largest mining companies including the first ever collective net loss and market capitalisation reduction of 37%.
A 25% year-on-year decline in commodity prices meant mining companies had to continue to find productivity improvements and for some, to fight for survival with asset disposals. $297B was wiped off the market capitalisation of the Top 40 miners, effectively wiping out all gains made during the commodity super-cycle.
Download Mine 2016
Investors punished the Top 40 for poor investment and capital management decisions and, in some quarters, for squandering the benefits of the boom.
Concerns over the 'spot mentality' from shareholders focussed on fluctuating commodities prices and short term returns rather than the long term investment horizon required in mining.
A focus on maximising value from shedding assets as well as mothballing marginal projects or curtailing capacity by Top 40 miners. This is further evidenced by a significant drop off in capex signalling an almost stagnant investment environment.
Whilst the industry continues to face significant market challenges and constraints, there is still a long term positive outlook. Many of the Top 40 appreciate what is required for the marathon of mining and have their eyes firmly fixed on the long term rewards.