Six years in and we’ve seen some important changes happening within the mining sector. Each year the Mining Business Outlook Report aims to capture the outlook, challenges and opportunities within the industry.
Keeping our finger on the pulse, this year’s Mining Business Outlook Report shows a slight revival in the overall mood of the mining sector.
We spoke with Michael Roche, CEO of Queensland Resources Council and Mr Peter Harris, Chairman of the Productivity Commission to capture their insights on the sector’s state of play.
After last year’s concerns leaders continue to get serious about their business operations and focus on remaining competitive through whatever it takes in order to bounce back to their former glories. There has been an acceptance of market conditions resulting in the recalibration, and refocus of internal operations.
Our interviews with 50 mining executives yielded some key messages:
Miners are making the changes needed to survive.
For the first time in three years, leaders are marginally more optimistic about their future prospects because prices show signs of stabilising and high cost mines are closing.
Miners continue to exercise caution in the management of their operations.
A sizeable 78 per cent will reduce Capex this year, almost double last year, while 80 per cent will reduce headcount.
New take or pay contracts may close more mines.
New contracts for rail and port operations in the coal regions of New South Wales and Queensland is likely to result in reduced volumes for the rail and port operators and more mine closures.
Leaders are more confident with prices stabilising over the next 12 months.
This follows a protracted levelling-out of the market. At the same time, miners’ operations recognise the possibility that rices may plunge again.
Productivity keeps leaders awake yet remains an untapped potential for miners.
With more mines having come online now is the time to drive productivity through better operational and managerial models, a better workplace culture, and other initiatives that boil down to working smarter and not harder.
Industry calls for the government to act quickly on implementing industrial relations reform.
Miners have taken on many of the infrastructure investments they hoped to receive from the government over the last few years. It now remains for government to play their part through reforming industrial relations law and unions.