Toronto, May 26 (IANS) The world’s mining sector is back to booming, according to a report by PricewaterhouseCoopers (PwC) here Tuesday. The annual report, Mine: Back to the Boom, on the mining sector says the world’s top 40 companies experienced major recovery in 2009 after big losses in 2008.
Toronto’s stock exchange has the world’s largest number of mining companies listed on it and the city is the venue of the world’s biggest mining gathering annually.
The report says that despite a shaky start to 2009, market capitalization for the top 40 increased to levels similar to those seen in 2007, rising 118 percent or $696 billion.
Despite commodity prices continuing to fall globally in early 2009, mining companies also managed to protect their bottom lines by restructuring funding, closing mines, and cutting production. The year ended with a significant rebound in commodity prices, the report said.
‘Despite the global economic crisis, none of the top 40 mining companies were subject to bankruptcy or voluntary administration provisions,” said John Gravelle, partner and national leader of PwC’s Mining Practice, in a statement.
‘This is largely due to their success in removing their debt overhang, and benefitting from strengthening commodity markets and government stimulus packages,” he said.
However, the top 40 companies posted 15 percent less revenue and 26 percent less profit in 2009 as compared to 2008. The report says the mining sector is concerned about the Chinese economy as it will have impact on demand, foreign exchange rates, and the impact of unsustainable government budget deficits, and the global economy.
‘The outlook expressed by industry leaders is more positive than in 2008 when tough decisions were required to cope with the downturn,” said Gravelle.
‘However, CEOs (of top mining companies) remain concerned that governments with challenging budget deficits will look to the mining industry as a source of additional tax revenues.”
rounak