adminoutweigh record commodity prices, PricewaterhouseCoopers said yesterday.
Revenues for the world’s 40 largest miners by market value rose 32 percent to a record US$435 billion in 2010 on higher commodity prices and a 5 percent climb in production.
However, cost pressures meant the return on equity was only 22 percent last year, compared with the highs of 31 percent and 28 percent in 2006 and 2007 respectively.
“With no sign of inflationary pressures easing, maintaining cost discipline in a volatile global and financial environment remains extremely important for the industry,” PwC’s global mining leader Tim Goldsmith said.
Top 40 mining companies have announced more than US$300 billion of capital expenditure programmes, of which over US$120 billion is planned for 2011, PwC said. “The real challenge now is addressing ever rising costs with huge forecast capital expenditure programmes compounding already tight labour and materials supply – and increasing complexities in operations, as sourcing new supply continues to move into more remote and challenging locations.” – Reuters.
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