The Asia Miner

JAN-MAR 2019

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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the asia miner • volume 16 • issue 1 4 LEADING DEVELOPMENTS With a cyclical recovery in the commodity markets, there has been an upঞck in corporate earnings, cash flows, and credit raঞngs, and a corresponding drop in debt levels. As a result, spending is again on the table, with mining companies considering invesঞng in capital projects and engaging in mergers and acquisiঞons. The road ahead, however, is a lot more complex than it was five years ago, with mining companies facing the need to address operaঞonal quesঞons within a market filled with volaঞlity; rising stakeholder demands; constant disrupঞons; gaps in talent; dwindling access to key inputs such as energy and water, and a Chinese economy growing at under seven per cent, rather than the expected 12 per cent. Deloie, in their Tracking the trends 2019 report, states that "in this new world order, miners will not aract talent, investment, or community support if they only focus on communicaঞng the value that they currently bring to communiঞes". Deloie argues that miners will need to go a step further and arঞculate what they stand for by developing differenঞated business models designed to drive long-term value. "It appears that the mining industry is poised for greater growth than it's seen in a decade, but today's market realiঞes are very different than those of the past," says Philip Hopwood Global Leader, Mining & Metals Deloie Touche Tohmatsu Limited. "We're now dealing with geopoliঞcal tensions in the form of trade wars and tariff concerns, as well as looming asset shortages. Rising commodity prices should fuel expansion but could also result in a return of inflaঞon and the costs that go with it, eventually eaঞng into margins. "Disrupঞon and volaঞlity have become the new normal Deloitte tracks mining trends for 2019 Australia's five-year mining investment slump looks to be turning, with the resources sector looking to start adding to growth again instead of dragging on the economy. "We're now dealing with geopolitical tensions in the form of trade wars and tariff concerns, as well as looming asset shortages.

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