Mining Industry Status For The Rest Of 2015 - Literated Market Research

Mining Industry Status For The Rest Of 2015 - Literated Market Research

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Mining Industry Status For The Rest Of 2015 - Literated Market Research The mining industryfaced certain tough challenges in 2014, which are expected to continue through 2015.

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Published 26 September 2015
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Mining Industry Status For The Rest Of 2015 - Literated Market Research
The mining industry faced certain tough challenges in 2014, which are expected to continue through 2015. Issues related to price volatility, geopolitical turmoil, rising costs, declining grades and a general lack of access to financing were the main impeding factors that mining companies large or small, faced in 2014. Industry similar trends in 2015 albeit somewhatanalysts predict muted.
Commodity prices and demand, particularly iron ore and coal, have fallen during the latter part of 2014 and into 2015. It continues to remain low and with growth prospects for countries like China and India remain uncertain, interest rise debate riddle in the US economy and the slow growth in the EU economies are impediments for the investment intensive mining industry.
Violence and fighting on the Russian border and the crisis in Syria affecting the entire Eastern African region have destabilized operations and economies in these regions and continue to raise concerns.
However, on the other hand the good news for themining industrythat the US economy is is rebounding. Despite the overall downside in the commodity market, some segments like nickel, aluminum, zinc and lead are showing some upside and are a source of hope for the mining industry this year.
The industry fundamentals like mining capitalizations and total returns have shown improvements in 2015 and are coming back into favour with investors.
The top 40 companies in the industry have made improvements in most financial statement metrics and despite them loosing $156 billion or about, 16% of their combined market value in 2014, they managed to better this aspect by 50% compared to 2013.
However, as in 2014, the prospects for a large segment of the industry, including the coal producers, junior miners, explorers and mining service providers are not as bright as for other segments. These segments, say experts, now feel the effect of cyclicality which is typical of the mining industry.
Analysts pin the importance of achieving sustainability and success in a volatile market by determining not how to ride the sector’s typical waves but how to accelerate resurgence from a down cycle.
2015 has seen a large part of the mining companies rising to this challenge and strengthening their cost reduction and capital allocation practices. Strategically, however mining companies require being agile enough to move in unanticipated directions to be able to position themselves for long-term growth. More sensitive scenario planning, better sophisticated data analysis and enhanced intelligent risk management are required to achieve this.
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