BHP warns Australian mining not ready for low-cost competitors
The boom in demand from China’s industrialization is now “past the period of aggressive growth,” BHP’s Australia President said.
Emerging market mining companies outperformed their peers from traditional markets on profitability and on dividend yield in 2013 and continue to do so this year, the latest study released by PwC shows.
In its Global mining report 2014, the experts note that net profits from progressing economies-based miners reached $24 billion in 2013, compared to a net loss of $4 billion for developed market firms.
Source: PwC’s Global mining report 2014
According to the analysts, results in upcoming elections to be held in India, Brazil, Indonesia and South Africa may further alter the influence of emerging markets on mining. This will especially affect coal and iron ore, and potentially gold and potash, which incidentally contributed the most to decline in profitability.
Source: Global mining report 2014
However, PwC warns that success in developing mining districts can be tricky, as licence to operate in all corners of the globe is becoming more challenging, with governments increasingly eager to expand their share of royalties and taxes.
