Top miners squandered $200 billion during boom
By GCRU Gold News on Thursday, June 9 2016, 08:01 - Permalink
There are many startling statistics in PwC's latest report into the performance of the world's 40 largest mining companies which the management consultants called a "race to the bottom".
The Mine 2015 report shows the top 40 companies suffering their first collective net loss in history of $27 billion, a loss in collective market capitalization of 37% (to below half a trillion dollars) with some companies now trading below net book value, the lowest return on capital ever and record high leverage of 46%.
Some of the dismal metrics can be explained by low commodity prices, a weak operating environment and shareholders revolt, but the report also found that poor investment and capital management decisions squandered the benefits of the boom.
With a further $53 billion of impairments in 2015, miners had wiped out the equivalent of just under 32% of their actual capex since 2010 offering "a stark reminder of the value that has already been lost," says PwC.
These asset writedowns amount to a stomach-churning $199 billion in lost value of the collective $632 billion in capital spending from 2010 – 2015 and represents a hefty 77% of this year’s capital expenditure.