Miners quietly confident about the year ahead – by Alex Heber (Australian Mining – March 12, 2013)


Grant Thornton has released its latest International Mining Report, surveying 389 mining executives across the globe in an effort to discover their thoughts on industry trends.

What it found is a heightened optimism surrounding business prospects across the board. Behind this optimism is the expectation that commodity prices will continue to rise this year, with 54 per cent of those surveyed indicating to this effect.

“It’s a challenging time for the sector,” Mark Zastre, global industry leader mining Canada, said. “But growth can return; the risk-return equation will change once investors develop a renewed enthusiasm for potential high returns that few other opportunities offer.”

Aiding this growth are significant improvements to processes with automation and technology developments delivering efficiencies.

Miners’ global expansion movements are also improving supply and assisting the discovery of new resources.

Regulation overload

The role government plays in constraining growth and delaying projects across the globe heavily impacts miners’ performance and investor confidence.

While the report found that most miners are confident about the location of their assets, 42 per cent nominated increased government involvement as a constraint to growth.

While Australia doesn’t have the same unpredictable level of sovereign risk as other mining nations around the world, it does have its own level of resource nationalism in the form of the mineral resources rent tax (MRRT) and the carbon tax.

“Whether it’s through resource nationalism, special mining taxes or the gradual creep in taxation, governments are looking for a larger share of mining company profits,” Deloitte’s Queensland mining leader, Reuben Saayman, said.

Australian Mining has previously spoken to Grant Thornton on this issue of rising resources nationalism and indigenisation.

At the time the company explained that “increasing and unpredictable government intervention across the globe is adding further complexity to a sector that is already heavily laden with risk.

“The shadow of higher taxes, restrictive regulation and indigenisation looms large for an industry already grappling with the risks normally associated with exploration and extraction,” the company stated in its previous report Facing an uncertain future: Government intervention threatens the global mining sector.

For the rest of this article, please go to the Australian Mining website: http://www.miningaustralia.com.au/features/miners-quietly-confident-about-the-year-ahead


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