[VIDEO] PwC's 2015 mine report: The Gloves Are Off
“The general outlook for the global metals and mining market remains subdued due to the combination of a slower rate of global economic growth, particularly in emerging markets, and signs of an oversupply of several commodities, most notably iron ore and coal,” said the report.
• Related content: Fading away: South Africa's mining industry falls out of top 40 mining list
“Lower crude oil prices and a stronger US dollar are proving beneficial for miners by helping to lower operating costs. The uneven global economic recovery and divergent monetary policies continue to create uncertainty around medium-term supply and demand across the mining industry.”
In this short video, PwC's WA Mining Partners discuss the issues raised in the Mine report in an Australian context including the deals environment, tax transparency and the outlook for our local industry.
The 12th annual report, which reviews the top trends in the global mining industry, includes a detailed financial analysis of the Top 40 mining companies globally by market capitalization. According to the report, the top 40 senior producers lost $156 billion during 2014 while the pace of mergers and acquisitions (M&A) came to a screeching halt. Key findings in the report include:
• Overall market values plummet $156 billion in 2014
• Free cash flow increased to $24 billion; but net profit down 9 percent
• Government intervention, shareholder activism, internal industry conflict on the rise
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.