Overall, market performance declined by $ 156 billion due to lower commodity prices. Free cash flow again reached a positive mark of $ 24 billion. At the same time, net profit decreased by 9%. Capital turnover decreased for the first time since 2010 and continues to decline. Dividend income indicators reached an unprecedented high of 5%. Many market players feel the effect of lower prices. At the same time, the level of state intervention in the industry is growing and the number of conflicts due to strategic differences is increasing
2014 was expected to be challenging for the global mining industry due to lower commodity prices and increased short-term volatility. The position of the 40 largest mining companies was initially mixed. Now, industry players will have to forget about the ceremonies and fight “without gloves”: the results of the annual PwC report “Mining” show that the industry will have to face an increase in government intervention, internal conflicts between market participants, as well as increased shareholder activity.
Evgeny Orlovsky, PwC Partner in Russia, Head of Consulting Services for Metallurgical and Mining Companies in Russia:
“Since the publication of the report a year ago, Russian mining companies – Norilsk Nickel, Polyus Gold, ALROSA – have approximately maintained their positions in the global Top-40 ranking by capitalization, while Uralkali lost some positions due to with the retirement of a number of production facilities. This confirms the stability of the Russian mining sector to a recession in the domestic market, when adverse macroeconomic conditions were partially offset by increased competitiveness in global markets due to the devaluation of the ruble. Russian companies, as well as their international competitors, continue to increase operational efficiency and reduce costs, which, like last year, remains one of the most important priorities for shareholders and top management. Considering that the effect of the devaluation will gradually disappear, Russian companies now have a rare “window of opportunity” to improve their long-term competitive position. ”