Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The new Sandvik strategy presented in September 2011 laid out the path toward a strengthened market leadership position based on four cornerstones: AMBITION, SPEED, FOCUS and GLOBAL/LOCAL. The strategy has subsequently been implemented successfully and according to plan. Recent strategic reviews have revealed additional potential for structural improvements in several business areas. At the same time, a number of measures are being proactively implemented to adjust costs due to the weaker market demand that was experienced during the third quarter and that has persisted thus far into the fourth quarter.
In addition to the ongoing improvement efforts at Sandvik Mining, a reduction of 650 employees globally has been deemed necessary, including the closure of the units in North Bay, Canada, and Rocklea, Australia. Thirdparty contracts with more than 350 individuals will be terminated. Charges of a nonrecurring nature are estimated at 175 million SEK and will be recognized in the fourth quarter 2012, with a further 175 million SEK recognized in 2013. Read More
