Miners Can't Find Love
Despite strong balance sheets and all-time high dividends, miners are underperforming the broader market, said PwC in an industry review released today.
PwC analyzed 40 of the largest listed mining companies by market capitalisation as of 31 December 2018.
"Notwithstanding multi-year high pro?tability levels supported by strong ?nancial positions, investors are seemingly not willing to invest at historic price and dividend yield levels, hence existing investors have not been rewarded with an equivalent market price performance," writes the reports’ authors.
PwC speculated that trade wars, geopolitical crises and continuing climate change are all holding back the industry.
Industry messaging is also poor and PwC feels that miners must work harder at selling their brand.
"The future success of the mining industry will not only depend on its ability to adapt but also its ability and willingness to sell its brand as the primary provider of raw materials to many essential industries and products that humans rely on everyday, whether it be the ten metals and minerals -- including gold, silver, aluminum and nickel -- that can be found in their cell phone, the lithium in the battery of their electric vehicle, the steel from iron ore in their cooking pot or the coal fueling their electric lights.”
There are only three mining companies that are in the 2018 Global 500 brand index, compared with 22 oil and gas companies, notes PwC.
Miners may benefit from associating their work with building a greener future.
"Prioritising green and customer-centric strategies, enabled by technology, will help earn the trust of stakeholders and enable miners to create sustainable value into the future."BiblioArchives / LibraryArchives