PRICEWATERHOUSECOOPERS (PwC) says the mining sector will continue to be under threat globally owing to various challenges surrounding the industry.
PwC’s Africa Mining Centre of Excellence head Michal Kotze said widespread government intervention, internal industry conflicts, competition, weakening commodity prices, with increasing short-term volatility and rising shareholder activism, which affected the industry last year, will continue to hit mines.
“The tough fight faced by the global mining industry in 2014 would escalate into a brawl this year as mining companies worldwide struggled to emerge from depressed markets,” he says in the latest PwC report obtained by Mining Weekly.
However, challenges that affected Zambia’s mining sector after Government resolved the value added tax refunds on mineral exports and the planned reduction of the controversial mining tax have been resolved.
Mr Kotze said coal and copper prices dropped to below 75 percent and 80 percent, respectively, while iron-ore prices dropped to below 50 percent by April.
PwC’s yearly analysis of the 40 largest global miners, in which a South African company did not feature for the first time, showed operating costs decreasing five percent on the back of exchange rate fluctuations, and the 40 percent reduction in the oil price.
The report also says, ratings downgrades weighed on companies wanting to emerge out of the battle unscathed.
Zambia Daily Mail