Productivity will define the future of mining

Growth in the mining
sector will only come with
productivity and investment,
said Mark Cutefani, Anglo
American CEO.
“Without productivity we have
no future. In
the short term it
may not be the
most important
issue, but in
the long term
it is the only
issue. When
it comes to
investment we
must remember
that it follows
returns not the
other way round.”
With the mining sector
under pressure, having seen
commodity prices in 33
months only go up once, this
was extremely important to
remember, he said.
“If we break the reduction
in price over the past 33
months into percentage it is a
drop of about 1.5% per month
in our prices – and from a
company perspective that is a
$350-million-a-month decline
in our revenues.
It’s a big
number and it’s
a big number for
the industry.”
He said Anglo
had taken at
least 30% of
cost out of its
business and
was continuing
to restructure
and create
a new company to face the
turbulent times.
“In the short term it is not
going to change. 2016 will
be tougher than 2015. I hope
the next time we go through
these cycles we will be better
prepared.”
Cutefani said at the start of
2013 the aggregate of market
capital mining stocks on the
Financial Times Stock Exchange
was $550 billion dollars, while
in January this year they were
down to $169 billion dollars.
“Global mining stocks
have lost $1.4 trillion in
market value,” he said. “This
is not news, but it gives one
perspective on the challenges
faced.”
INSERT & CAPTION
Anglo has taken at least
30% of cost out of its
business and is continuing
to restructure.
– Mark Cutefani