Aussie Mine 2013

Unloved… survival of the fittest

In its 7th year, Aussie Mine provides an industry and financial analysis of the largest 50 mining companies listed on the Australian Securities Exchange (ASX) with a market capitalisation of less than $5 billion at 30 June 2013 (the mid-tier 50). For the first time in Aussie Mine, we include a feature on mining services contractors.

It’s been a challenging year for the mid-tier 50 with falling commodity prices and increased costs impacting the bottom line. These conditions together with declining investor confidence have seen the combined market capitalisation of the mid-tier 50 plummeting 50% in two years. The entry level to make the mid-tier 50 is now just $172 million.

Key financial headlines from this year’s mid-tier 50:

  • Net operating loss of > $1 billion (AUD)
  • Impairment charges totalled $3.5 billion
  • Net assets of the mid-tier 50 > market capitalisation
  • Operating cash flows down 17%
Despite the challenging conditions the industry is enduring, the outlook is positive for the mid-tier 50, with continued strong demand from China and other developing nations. The investment in new production over recent years is starting to pay off, with half of the mid-tier 50 producers increasing production by greater than 30%. In particular, those who can capitalise on current market conditions will regain the love of investors and deliver shareholder value in the near term.

Aussie Mine - Nov 13

Aussie Mine - Staying the course - Nov 12

PwC's analysis of this year's mid-tier 50 outlines what has been a trying year for some Aussie mid-tier miners.

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Aussie Mine - Nov 12

Aussie Mine - Onward and Upward! - Nov 11

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).

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Aussie Mine - Nov 11

Aussie Mine: Rise and Shine - Nov 10

This year's analysis presents an interesting foundation for what is anticipated as a return to form as Australian mid-tier miners Rise and Shine. Many mid-tier miners are currently enjoying bullet proof balance sheets, commodity price strength and a responsive and optimistic equity market, perhaps tempered by a strong Australian dollar (A$) and uncertainty around changes to the tax regime. Our analysis will provide further understanding of these key factors.

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Aussie Mine - Nov 10

Aussie Mine: Road to Recovery - Nov 09

Financial year 2009 will be a hard year to forget. June through December 2008 left an enormous mark on the Australian mining mid-tier 50 and the broader economy as a whole. Share and commodity prices were in free-fall and mining was one of the most GFC-affected sectors. Balance sheet analysis moved from the back of monthly management accounts to comprehensive front and centre analysis. Debt became undesirable to those with too much and almost unobtainable to those with too little. Mines became unprofi table and activities were suspended or ceased.

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Aussie Mine - Nov 09

Aussie Mine: A tale of two halves - May 09

The Mid-tier 50 experienced a year of two distinct halves during the 2008 calendar year. The early part of the year saw continued buoyancy in the Australian mining sector: commodity prices remained relatively high, companies had little difficulty in raising equity to fund asset purchases, and exploration and consolidation in the industry continued at pace. The Australian public was still keen to reap the rewards of the mining boom, and mining stocks were outperforming other industries on the ASX.

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Aussie Mine - May 09

Aussie Mine: Reaping the rewards - Jun 08

The Mid-tier 50 sector has again had a spectacular year by any measure. Aggregate market capitalisation has increased by 68.5% for the 50 companies analysed. This is at a time when, in general, global fi nancial markets have been under pressure compared with recent years. Similar to last year, the industry's success has occurred on the back of strong commodity prices and increased production. These factors have resulted in the Mid-tier 50 companies delivering extraordinary shareholder value.

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Aussie Mine - Jun 08