Babalwa Bungane reports that weak commodity prices, declining grades, and a fall-off in demand from China will continue the global mining sector downward cycle well into 2016. However, regulatory mandates, tax burdens and stakeholder expectations remain as high as ever. This is according to the Deloitte Touche Tohmatsu (via Deloitte Global) Tracking the Trends 2016 report.
Similar to the boom cycle, where people imagined prices would go up forever, people now imagine the market will never recover. Neither extreme represents the truth. What is true, however, is that cycle times are lengthening. This means it could take years to adjust to current market forces, but it is still a cycle, says Andrew Lane, Energy & Resources Africa Lead.
The top issues facing mining companies in 2016 include:
1. Going lean ... Operational excellence remains front and center
2. Innovation ... Preparing for exponential change
3. China transition ... Looking for the silver lining
4. Adjusting to the new normal
5. Preparing for inevitable change
6. Changing the nature of stakeholder dialogues
7. Starved of finance, miners struggle to survive
8. Tax challenges will impact management
9. The M&A paradox ... To buy or not to buy
10. An expanded view of corporate and personal welfare
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