Australian Mid-tier Miners’ Revenue Rises Despite Global Recession

Lucas Gilmore, “Big 4″ observer
November 23, 2010 /

After the 2008 global recession, mid-tier miners’ revenue in Australia managed to record a 32 percent high with increased market capitalization, says PricewaterhouseCoopers.

PwC’s report, Aussie Mine — Rise and Shine, showed about 25 percent increase in the combined revenues of the mid-tier 50 for financial year ended June 2010, from $8.5 billion to $11.3 billion. Tim Goldsmith, PwC’s global mining leader, said the increase in the miners’ revenue amidst global recession has brought about an “unprecedented opportunity at its doorstep.”

Goldsmith pointed to the strong demand for gold, copper and platinum as the drivers of this jump in the miners’ revenue this year.

Goldsmith said industrializations have been observed during China’s rise, except that this scale has been very rare following the global recession.

Australia’s mid-tier miners have also managed to increase their market capitalization from $41.5 billion to $63.9 billion in the same financial year against the previous figures. The last financial year’s market value of companies had hit $52.1 billion.

Goldsmith said Australia’s mid-tier miners have enjoyed the shift in the sentiments of the market.

“Putting the market capitalisation increase into context, the past 12 months has returned the value that was lost during the global financial crisis,” he added.

The shift in market sentiments has led the mid-tier miners to a $3.8 rise in capital this year after they have asked the market for more funds to be injected into new projects. Goldsmith said the current net cash position of the mining sector was actually its net debt position before.

Goldsmith also said the mining sector has survived the temptation of merger and acquisitions during the global recession and is now currently heading towards new opportunities.


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