Miners need to balance financial discipline and growth to deliver shareholder value in 2017

13 February 2017

Deloitte: Intensifying the focus on shareholder value has been identified as a key trend for mining companies in the 2017 edition of Deloitte’s annual Tracking the Trends mining report.

The report identifies a mood of cautious optimism in the mining industry, with commodity prices on the rise, shallow growth returning to different end markets, and most mining companies in better cost positions than in the recent past.

“The focus on shareholder value in the mining industry is sharper than ever before, with return on invested capital a key metric,” explained Nicki Ivory, Deloitte National Mining Leader.

“While companies are starting to focus on growth again, this is being carefully balanced with the need to maintain financial discipline. Growth strategies are no longer about significant M&A deals and major new capital projects, but focused on portfolio optimisation through a combination of brownfield expansions, strategic acquisitions and/or divestments and productivity improvements.”

Whilst optimism is increasing, the industry is still at a pivotal point as it confronts challenges from cyber security threats, technological disruption and environmental issues. Mining companies now face key choices about where to invest and how to position themselves in the coming years.

“Miners willing to engage in substantive change, by rethinking strategy and embracing the digital revolution to help unlock productivity and improve sustainability, will likely be best positioned to succeed,” said Ivory. “But these companies will require strong leadership, greater collaboration and adoption of a long-term view to propel the industry forward.”

Additional issues identified in Tracking the Trends 2017, include:




Source:  Deloitte - www2.deloitte.com

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External Links:  Deloitte’s annual Tracking the Trends mining report

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