Mine 2020
Resilient and Resourceful According to McKinsey’s report, Mine 2020, the Top 40 mining companies are so far weathering the COVID-19 storm mostly unscathed, and certainly better than many other sectors. This is a remarkable feat, given that global growth is expected to decline in 2020, something that is only happened twice in modern times: in 1944, during World War II, and in 2009, during the global financial crisis. The ability of the Top 40 to ‘resource the future’ continues to be relevant in the current environment as many governments will appreciate mining for being a bedrock of economic recovery out of this crisis. Our forecast for 2020 suggests the Top 40 miners will take a modest hit to EBITDA of approximately six per cent. Capital expenditure will also slow, freeing up cash flows, and giving miners the capacity to pay dividends should they choose to do so. 23 Mining and Tunnelling Technology
We do not expect many mega-deals to take place in 2020 due to increased economic uncertainty and practical constraints of site visits and inspections. However, the current conditions provide opportunities for the Top 40 to capitalise on smaller acquisitions in their local markets. Gold deals are not likely to recur to the same size or quantum as in recent years. Although mining has been able to keep operating through the COVID-19 crisis, companies have also had to adapt and evolve. Some changes have been for the better, such as remote workforce planning and greater use of automation. Many of these adaptations may become permanent. In an uncertain
