Survey: Mining Companies Scale Back, but Remain Bullish for Future Turnaround

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--In a survey of 140 mining executives around the world, only 22% of respondents thought that the mining sector would perform better in the second half of 2012 compared to the first half of the year, while 41% suggested that it will perform worse. When the coming 12 months were compared with the past 12 months, 63% of executives said they believed that the sector will perform at the same level or get worse.

But, says the report from The Mining Recruitment Group (Vancouver, Canada), respondents felt bullish about the prospects of their own business for the remainder of 2012, with 63% thinking that their company would outperform the market as a whole. Only 3% felt their own business would have a worse time in the year ahead. A significant majority, 71%, said that their companies have made a concerted effort to reduce overhead.

Of those focused on cost savings, 64% have scaled back on marketing and investor relation budgets, 32% noted a reduction or elimination of incentive pay, and 80% have scaled back on their exploration or development plans. Taking a three-year perspective, 82% of those polled were bullish on the strength of the industry over that period and only 5% were bearish to any degree.

When asked to predict when market conditions would take a sustained turn for the better, 56% thought it would take until the first quarter of 2013 or beyond to develop any sort of real traction. But 38% took the optimistic view that the turnaround would start in the fourth quarter of 2012. Only 5% thought it would happen before the fourth quarter.

The lack of investment capital was a moderate or extreme concern for 76% of respondents, but only 43% were moderately or extremely concerned with the volatility of commodity prices over the next two years.

No further layoffs were being considered by 76% of executives for the rest of 2012, but 60% did not expect to recruit over the next six months. For those still recruiting, geologists will be in demand from 71%, 50% need mining engineers, and 21% will add executive leaders.

Only 32% of respondents said that their companies were involved in any sort of succession planning.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.