The results are undeniable, Australia’s mid-tier top 50 miners are back on a steady footing.
After emerging from recent dark days, some miners are reaping the success of having plotted their moves in difficult times, others are carefully pondering their next steps still wary from the experience of having the wisdom of capital allocation decisions questioned.
Building on the brighter investor sentiment in 2016, the mid-tier sector was further buoyed in 2017 as coal and iron ore players joined the strong performance delivered by Australia’s MT50 gold miners.
PwC’s Aussie Mine 2017 report provides industry and financial analysis on Australia’s mid-tier mining sector as represented by the mid-tier 50 (the 50 largest ASX mining companies with a market capitalisation of less than $5 billion at 30 June 2017, also known as the ‘MT50’).
The deals environment of 2017 was a paradox between actions of the MT50 top-end stayers and the actions taken by the up-and-comers. Commodity prices have improved driving willingness from buyers to seek new opportunities and invest. However, as buyers become more eager, vendors have also reacted to the market. 2018 may see targets increase their price expectations and be willing to hold if they cannot derive their desired value.
The industry now has a golden opportunity to prosper in this new, more positive market environment.