SNL Metals & Mining is an offering of S&P Global Market Intelligence. We publish regular mining reports which provide unique insights into the latest developments of the global mining industry. Our reports detail the current state and outlook of the mining industry, focusing on data-driven trends in mineral exploration, metals production, mining deals and corporate finance.
Australia is the second-largest nonferrous exploration destination, although iron ore was the most valuable commodity produced at nearly USD$34.3 billion in revenue, followed by gold at USD$10.3 billion in 2015. For an overview of key mining activities in Australia, including drilling and development activity, commodity revenues, reserves and resources in situ values, capital raisings and corporate exploration budgets, download the infographic.
Mining equities rebounded after a softer August, with SNL Metals & Mining’s aggregate market value of the industry’s listed companies (based on 2,499 firms) rising to almost US$1.17 trillion, up from the US$1.12 billion at the end of August.
The iron ore price increases of 2003-2011, and subsequent collapse, was a function of supply/demand imbalance rather than a concerted strategy by producers to control the market to their benefit. Analysis by the SNL Metals & Mining database concludes that the price retreat was a somewhat delayed return to the marginal cost of production and normal profit margins as could be expected in a competitive market.
Due to an oversupply of copper and a slower Chinese economy compared with previous years, copper price has reduced over a third of its value since 2011 to average US$2.49/lb in 2015. However, cash costs fell only 7% in the same period. How are producers reacting to this contraction in margins?
After several years of cutbacks throughout the industry, highlighted by persistent declines in exploration and capital expenditures, the evolution of the near-term supply pipeline can be deduced from a review of recent mining project status changes documented in the SNL Metals & Mining database and Industry Monitor report.
While the annual total acquisition price paid for gold has steadily declined after reaching a peak in 2010 at US$22.02 billion, the total acquisition price of US$9.52 billion in 2015 was the third highest in the ten-year period.
According to the State of the Market: Mining report, there has been a shift towards the perceived safe havens of the Japanese yen, the U.S. dollar and gold in the aftermath of Brexit. Despite the stronger dollar, the increased interest in metals helped the mining industry's combined market capitalization rise from US$952 billion at the end of March to US$1,068 billion at the end of June.
The SNL Metals & Mining database recorded 50 deals valued at US$5 million or more in the June quarter, compared with 25 deals in the March quarter and 46 in the year-ago quarter. Quarter on quarter, the total value of the deals jumped from US$3.53 billion to US$8.01 billion, which compares favorably with the US$7.70 billion in the June quarter last year.