Mining Industry Returned To Profitability In 2016 – PwC’s Mine 2017 Report

Updated on 8 June 2017

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According to PwC’s Mine 2017 report, the world’s Top 40 miners recovered from a race to the bottom, with bolstered balance sheets and a return to profitability in 2016, giving them much-needed space to pause and draw breath.

As it looks to the future, the 14th edition of PwC’s industry series analysing financial performance and global trends, also outlines the new opportunities and hazards on the horizon.

Mine 2017 was released by PwC Africa yesterday at the Junior Indaba conference held in Johannesburg.

Michal Kotzé, Energy, Utilities and Mining Industry Leader for PwC Africa, commented: “The narrative of the Top 40 in 2016 tends to read like a mine site safety mantra: Stop. Think … Act. The industry has moved out of danger but 2016 was not a year of significant action, and we now wait to see who will be bold and step out beyond the fluctuating market confidence.”

The report analysed 40 of the largest listed mining companies by market capitalisation. The financial information for 2016 covers the reporting periods 1 April 2015 to 31 December 2016, with each company’s results included for the 12-month financial reporting period that falls into this time frame. The number of emerging companies included in the Top 40 has decreased by two and now totals 17. There were seven new entrants from the previous year, five of which had made appearances on previous rankings in either 2014 or 2015. First Quantum and Teck Resources re-emerged on the 2016 list after strengthening their financial positions.

The report recognises a return to profitability in 2016, with an aggregate Top-40 net profit of $20 billion; after an aggregate loss of $28 billion in 2015. The improved fortunes of the industry were then directed to strengthening balance sheets.

Curro Holdings Buys Prestigious Film School AFDA

Private school operator Curro Holdings said on Thursday that it had acquired 100 percent shares of the South African School of Motion Picture Medium and Live Performance (AFDA) for an undisclosed amount through its subsidiary, Stadio Holdings.

AFDA is a South African-registered higher education institution with nine accredited programmes, ranging from higher certificates to masters degrees, primarily focused on the film, television and live performance industry. It is rated as the number one film school in Africa.

AFDA was founded by Garth Holmes and Bata Passchier in 1994, and has since grown from six students to approximately 2,000 students in 2017, with campuses in Gauteng, Cape Town, Durban and Port Elizabeth.

In 2016, AFDA launched a Bachelor of Commerce in Business Innovation, as well as a Bachelor of Computer Technology, as part of its strategy to expand its product offering, as well as to meet the demands and opportunities of the creative economy.

In addition, AFDA is in the process of seeking out opportunities to expand its offerings geographically.

Curro said this strategy was aligned with Stadio’s strategy of creating further access to tertiary education through the expansion and development of its core brands. Stadio is Curro’s wholly-owned tertiary education business. (via African News Agency)

Sibanye Gold Emerges Stable and Positive From Credit Rating Agencies

Sibanye Gold received affirmative credit ratings from two credit rating agencies on Wednesday.

Sibanye received a Ba2 rating from Moody’s Investors Service with a stable outlook, and also received a B+ rating with a positive outlook from S&P Global Ratings.

In assigning the stable corporate family rating to Sibanye, Moody’s said that it reflects the company’s solid business profile underpinned by diversified metal production revenues, as well as the its track record of setting and sticking to conservative financial policies.

The ratings outlook assumes Sibanye will “deleverage as planned, following the addition of the Stillwater acquisition debt and the successful integration of the new mining assets”.

S&P said its positive outlook reflected its view that Sibanye will “generate positive discretionary cash flow after the Stillwater Mining Company acquisition that should enable it to gradually reduce leverage in line with its stated financial policy”.

In May, Sibanye completed the acquisition of Stillwater, the United State’s sole provider of platinum and palladium, for $2.2 billion (about R30 billion).

Stillwater, located in Montana in the United States, owns the highest grade Platinum Group Metals (PGM) mines in the world, producing approximately 550,000 ounces of grade 2E PGM per annum from two operating mines. (via African News Agency)

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