Aussie Mine - Onward and Upward!
Our analysis this year shows that 2011 was a stellar year for the mid-tier 50, with key indicators across the board pointing to healthy growth in a sector which has recovered from the global financial crisis (GFC):
Organic growth through the successful development of projects typifies the Australian mid-tier, and this year we see strong evidence of it again. Although they will often fall prey to the larger global players, the mid-tier has taken on the role of strategic acquirer, and consolidation of more junior companies is another strong theme this year. We expect to see a lot more M&A activity in the forthcoming year, as companies jostle to take advantage of the indisputable strength in global demand for raw materials.
The industrialisation and urbanisation of the Asian region continues to present the Australian mid-tier miner with an unprecedented opportunity. The Asian century is upon us and the mid-tier is positioned to take advantage. As we put the finishing touches to this year's edition of Aussie Mine, a cautionary wind is blowing, in the form of volatility out of eurozone debt contagion fears and continued uncertainty in the US. Will global economic conditions test the group once again? With a high Australian dollar and a tightening labour market, operations at the higher end of the cost curve may be in for a bumpy ride. Even with this short term uncertainty, the strong long-term foundation laid by demand from developing nations remains. The mid-tier 50 are well placed to meet the challenges ahead and keep moving forward - it is onward and upward!
- net profits for Australia's top 50 mid-tier miners leaping from $38 million in 2010 to 2.4 billion in 2011; and
- the mid-tier's combined market capitalisation soaring by 39% over the year to 30 June 2011 from $49 billion to $67 billion.
Organic growth through the successful development of projects typifies the Australian mid-tier, and this year we see strong evidence of it again. Although they will often fall prey to the larger global players, the mid-tier has taken on the role of strategic acquirer, and consolidation of more junior companies is another strong theme this year. We expect to see a lot more M&A activity in the forthcoming year, as companies jostle to take advantage of the indisputable strength in global demand for raw materials.
The industrialisation and urbanisation of the Asian region continues to present the Australian mid-tier miner with an unprecedented opportunity. The Asian century is upon us and the mid-tier is positioned to take advantage. As we put the finishing touches to this year's edition of Aussie Mine, a cautionary wind is blowing, in the form of volatility out of eurozone debt contagion fears and continued uncertainty in the US. Will global economic conditions test the group once again? With a high Australian dollar and a tightening labour market, operations at the higher end of the cost curve may be in for a bumpy ride. Even with this short term uncertainty, the strong long-term foundation laid by demand from developing nations remains. The mid-tier 50 are well placed to meet the challenges ahead and keep moving forward - it is onward and upward!
Please contact
- Tim Goldsmith
- Global Mining Leader
- Tel: +61 3 8603 2016
- Wayne Huf
- Partner
- Tel: +61 8 9238 3356
- Ananth Rajaratnam
- Senior Manager
- Tel: +61 8 9238 3042
- Jacqui Thurlow
- Energy, Utilities & Mining Industry Manager
- Tel: +61 3 8603 3267
Of further interest