Newport Consulting’s seventh annual Mining Business Outlook Report found that confidence is slowly returning to the battered mining sector.
This year’s report found that 43% of mining leaders were cautiously optimistic about the year ahead, up from 2014’s low of less than 10%.
Leaders who are pessimistic have dropped from 93% to 55%.
Newport said miners were now focused on growth again, rather than merely survival, due to increased competitiveness, a recovery in resources, and an increase in customer demand.
“This is the first time in three years that the industry is clearly showing signs of a revival – not just a flicker of life but a distinct positive shift in sentiment and outlook,” Newport managing director David Hand said.
“Companies are spending again, have more confidence in stabilisation of prices, and have prioritised growth strategies.”
The report found that 15% of mining companies were focused on growth, and 27% were planning to moderately or significantly increase capital expenditure in the next year, up from 18% last year.
Companies which were reducing capex dropped to 30% from 78%.
Half of the 50 mining leaders interviewed expect commodity prices to remain stable for the next year after a plunge in the second half of 2015, while 19% expect prices to increase.
While 80% of companies expected to reduce staff numbers last year, only 44% expect to lower employee numbers for the year ahead. Around 8% expect to be hiring.
Still, 28% of leaders cited commodity prices and market conditions as their biggest challenge, followed by cashflow (25%), productivity (21%), staff retention (9%), and raising capital (7%).
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