Mining top executives are much gloomier about the current economic outlook than their counterparts in other industries, as the ongoing slump in key commodities, from iron ore to copper, continues to impact their business decisions.
CEOs however remain just as confident on their own company’s growth, according to PwC’s 18th Annual Global CEO Survey.
The study also found that industry executives believe threats have increased, being particularly concerned about higher taxes, geopolitical turmoil and how indebted governments will handle their deficits. Bribery and corruption is a major worry too.
The most disruptive force on the horizon according to the executives interviewed are regulation changes, with 84% of mining CEOs worrying about this versus only 66% in other industries. They were particularly cautious of Argentina (98%), Venezuela (96%), and the U.S. (90%). Mining top executives the gloomiest of all: report
Source: PwC 18th Annual Global CEO Survey.
At the same time, they revealed to be counting on China, U.S. and India as catalysts for much of their growth.
All sectors considered, over half of CEOs (54%) think it is likely that organizations will increasingly compete in new sectors other than their own; with nearly a third (31%) saying their company entered a new industry during the past three years.
Based on the responses obtained, PwC study also predicts an increase in mining mergers and acquisitions this year as almost half of all mining CEOs (44%) said they plan to form a new alliance in the next 12 months. More than a quarter (28%) said sharing risks is one of the top reasons why they are open to deals.
In the gold sector, however, such transactions may take time to materialize, as some believe shareholders are waiting to be certain that bullion prices have hit bottom