Mining mergers and acquisitions expected to pick up

Informa Insights

John Gravelle John Gravelle

Following a torrid year for mergers and acquisitions (M&A) in the mining industry, deal activity in the sector is predicted to rise once again, according to a new report from PricewaterhouseCoopers (PwC).

PwC expects mining activity to recover this year as developed economies stabilise and mining companies take a more strategic approach to adding assets.

John Gravelle, global mining leader at PwC, said that the historically low level of M&A deals last year meant mining companies have had to turn to new strategies to survive.

“Many companies looking to buy are eyeing similar commodities in familiar regions where they are already operating,” he explained.

“While overall, the mining sector has experienced short-term pain for what could be longer-term gain. To once again create shareholder value and extend mine life, miners will need to continue to acquire assets.”

In its report, the consulting group highlighted some of the…

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Miners rebound as gold prices ride hot streak

Financial Post | Business

The price of gold and the stocks of the companies that mine it have been on a hot streak this year.

Bullion has rallied about 10% since the start of the year to US$1,322.90 an ounce, a nice rebound following a crushing 2013 that saw prices fall 28% — their first decline in 12 years and the worst loss since the 1980s. The S&P/TSX Global Gold Index, which holds 37 gold exploration and mining names, has also joined in on the party, climbing 26.8% since Dec. 31.

The performance of gold stocks is notable because they are posting better returns than the precious metal itself for one of the few times in the past decade.

Gold stocks have underperformed bullion for seven straight years, mainly due to rising costs, lower margins and the introduction of new exchange-traded products that have made investing in physical gold easier.

There’s no doubt gold…

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IMF: Mining exports will offset investment losses

Informa Insights

868005-iron-ore Mining engineering investment may be winding down, but the sector will continue to make significant contributions to the Australian economy.

A new International Monetary Fund (IMF) report said the resources boom has reached its peak, although a significant rise in exports will underpin the industry for years to come.

The IMF stated Australia’s terms of trade were at their strongest in 2011 following record high global prices for the country’s popular commodities, including coal and iron ore. Strong demand for steel in China was particularly influential.

This resulted in mining investment making up 8 per cent of Australia’s GDP in 2013, up from just 2 per cent in 2002. Coal and iron ore spearheaded the charge, but LNG projects have quickly followed suit in order to help meet global energy demand.

A shift to mining exports

While mining investment will decline over the coming years, the IMF predicted this will…

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WA mining engineering construction shifts to production

Informa Insights

OLYMPUS DIGITAL CAMERAWestern Australia’s mining engineering construction has been a major component of the country’s resources boom in recent years. At its peak in 2012, one-third of all spending in WA’s economy was on capacity expansion such as new mines and equipment.

However, as Australia moves back a step from these lofty heights, it is important for WA to transition from mining engineering to production in an effort to maintain performance levels.

That’s the upshot of a new report from Deloitte, which noted that a potential reduction in Asian demand for resources could put a dampener on spirits in the sectors.

Matt Judkins, leader of Deloitte Access Economics in WA, admits there will be a down-tick in short-term growth prospects for mining firms.

“Western Australia’s construction boom has been very big, meaning the downside potential is too,” he stated.

“However, timing is everything and the ability for the state to manage a…

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Human factors affecting safety in the mining sector

Informa Insights

human factorsMining remains one of Australia’s most dangerous occupations, although deaths and serious injuries have shown a steady decline over the years.

However, according to Safe Work Australia, the number of fatalities in mining has nearly doubled from five in 2012 to nine in the year to date at time of writing.

While this is still significantly lower than the country’s top two most dangerous industries – transport, postal and warehousing (49) and agriculture, forestry and fishing (48) – it remains a concern.

This is particularly true as mining was one of the few sectors where deaths rose in 2013 compared with last year’s figures.

So what part do human factors play in mining engineering safety in Australia? And what can be done to overcome these issues?

Human factors

Human failures occur in all businesses, but the consequences of these mistakes are far more serious in industries where people’s lives are…

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