Discover why the world’s mining companies are being so frugal. Mining companies have been in the doghouse with investors for much of the past decade. They made hefty investments and accumulated significant debts during the 2000s and early 2010s, assuming that the surge in commodity prices driven by China’s economic growth would continue. However, as China’s economic growth slowed, commodity prices and industry profits plummeted, leaving mining executives embarrassed. In the years that followed, miners worked to clean up the mess, writing down over $50 billion in assets in 2015. The world’s most valuable mining firm, BHP, even divested its least-favored sites to raise funds and simplify its business. Despite the recovery of profits and commodity prices, investment in the industry has not rebounded. In 2022, the 40 largest miners collectively invested just $75 billion, a mere quarter of their earnings before interest, tax, depreciation, and amortization (EBITDA). BHP, for example, invested around $7 billion in 2023, a third of its 2013 spending. To learn more, check out the full article here.
Published on 2024-02-18 11:42:14
Source: www.economist.com
