Tuesday, 11 June 2013

PWC and E&Y Mining Reports

Two interesting reports out recently

PWC 2013 Mining Report "A Confidence Crisis" - HERE
The market has lost confidence in mining. 
…that costs can be controlled.
…that capital discipline will occur. 
…that new CEOs can deliver on promises. 
…that returns on capital employed will improve. 
…that the industry won’t pile back into too many new projects or expensive 
     deals when prices rebound.
…that resource nationalism will not overwhelm the industry.
…that commodity prices will not collapse.

E&Y Mining Report
Business risks facing mining and metals 2012 - 2013 
Plus a review at Mineweb
 Resource nationalism retains the number one risk ranking.Many governments are seeking a greater take from the sector. That is seen through a wave of new requirements, such as mandated beneficiation, export levies and limits on foreign ownership. Projects around the world have been deferred or delayed because of the degraded risk / reward equation.The uncertainty and destruction of value caused by such sudden changes in policy cannot be understated. This risk continues to grow and we don’t expect a slowing in this trend.

Something Kinross will surely confirm as they cancel development of one of the great discoveries of the past decade at Fruta Del Norte in Ecuador after failing to reach agreement with the government - writing off a $720m investment -  Story HERE

Will assets in safe jurisdictions be favoured once again?

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