Survey of mining executives reveals renewed pessimism in the sector
A report released Monday by The Mining Recruitment Group Ltd, a Canadian executive search firm focused on the resource industry, shows that a mere 9% of the 210 company’s leaders surveyed is bullish on the year ahead.
The results evidence that companies of all stage and size have had to make tough decisions in the wake of nearly unprecedented market turmoil, says Andrew Pollard, president of the Mining Recruitment Group.
However, he adds that long term sentiment is “steadfastly rosy,” as 66% of the mining executives interviewed think the next three years will see the mining sector regaining strength. Only 11% of them are bearish over this time horizon, with the remaining 21% holding a neutral view.
In terms of what commodities will likely see the greatest gains over the next three years, Gold was the clear winner with 74% of mining executives thinking it will shine the brightest.
Copper came a close second with 63% of respondents expecting to see massive appreciation in the metal while Uranium rounded out the top three at 53%. Silver followed with 50%, which was the only other commodity that there seemed to be a long-term consensus on, shows the survey.
Iron Ore, Molybdenum and Nickel are the main commodities executives see as having the highest likelihood of depreciating in value over the next three years.
Asked how current market conditions have affected their short-term business objectives, 39% of executives indicated that they have been launched into “pure survival mode.”
82% of surveyed leaders indicated the fear of a sustained downturn has impacted their budgeting and hiring behaviour.
What is worse, 46% of respondents admitted they were seriously considering layoffs or employee reductions for the third quarter of 2013.
Surprisingly though, those working for small mining companies (sub $50m market cap) are safer than those employed at larger firms, as only 27% of executives within that group said they were considering dismissals.
The answers considered in the study came primarily from executives at companies described as explorers at 46%. Among those remaining, 35% were mainly at the development stage and 19% were producers.
Of those polled, 73% came from companies with market caps below $50m, 13% from companies between $51M-$250M, and 7% from companies with market caps between $251m-$1b. Additionally, 7% were made up of executives from $1b+ entities.
Image: Statue depicting the downward bull and upward bear economic trends. By Albun/Shutterstock