The hottest mining industry in Australia has succe

Australia's mining industry has successfully come out of the trough, and how to act has become the focus of the future.

PwC's 2017 mining report is hot. The report defines 2016 as the year of recovery of the world's 40 largest mining companies by market value, with a continuous return of profitability and further revision of the balance sheet

Chris Dodd, PwC's Australian mining director, said that the mining industry was hit and hit the bottom in 2015, and the findings of the report were really "comforting"

Dodd used "barbarism" to describe 2015, when mining companies suffered collective losses for the first time, and investors voted with their feet to punish the top 40 mining companies for their poor capital management and investment decisions

however, by 2016, commodity prices had rebounded, and corporate profits had improved by $48billion. The overall turnaround achieved a total profit of 20 billion Australian dollars. Therefore, the roughness of the top 40 should not be too small. The total market value of enterprises increased by 45% to 714billion Australian dollars, and thus got some much-needed breathing space

Dodd said that the danger has passed, and the miners are in the "thinking" stage. So far, they have not seen any real decisive action. However, miners have made commendable efforts to repay debts and repair balance sheets

the net debt of 40 mining enterprises was reduced by a $20billion, and the leverage ratio fell to 41% from the record high of 49% in 2015. Moreover, most of the newly incurred debt is used for refinancing rather than for acquiring or developing mines

compared with M & A transactions, internal activities such as cost control and technological progress will be much lower key. According to the report, the results obtained are more likely to be related to the basic tearing capacity of materials. It is observed that there is a positive gap between the market value and net book value of mining enterprises, which was unprecedented in 2015. It not only reflects the rise in product prices, but also reflects the remarkable effect of cost control

some industry observers have criticized the top 40 mining enterprises for their extravagant spending during the boom period, and Dodd believes that they should applaud the mature performance of mining enterprises in the past 18 months

the rapid rise in commodity prices has triggered optimism in the market. The credit rating of the top 40 mining enterprises has been improved, which is estimated to be worth climbing, especially for traditional miners. This momentum continued until the first quarter of 2017

capital expenditure fell to a record low, exploration expenditure decreased

ACB News reported that due to efforts to repay debt, capital expenditure was correspondingly compressed, with a sharp decline of 41% to a new low of $50billion. The expenditure on exploration in the whole industry has decreased for four consecutive years. The total investment in 2016 was $7.2 billion, only 1/3 of the record $21.5 billion in 2012

the report believes that caution is likely to continue, and the development of relatively mature brownfield projects will become the trend, rather than new exploration or asset acquisition. Moreover, Dodd pointed out that mineral development continues to tend to countries with political stability

when miners experienced "thinking" and prepared for "action", a long-standing problem emerged, that is, when, where and how to take action

PwC report believes that under the current environment, mining enterprises have the opportunity to make strong, wise decisions that can produce long-term benefits. We should keep in mind the profound lessons learned in the last cycle, take a more counter cyclical approach to asset acquisition and divestiture while reaping the early investment income, and strive to break through the paradigm of "buying high and selling low"

Chinese enterprises take advantage of their capital advantages, and their interest in purchasing remains undiminished.

ACB News reported that one of the biggest M & A themes in 2016 was about unsold assets. Many large-scale transactions originally expected to be completed in early 2017 may be terminated due to the rebound in commodity prices and the improved prospects of these companies

more broadly, asset mergers and acquisitions in 2016 were mainly strategic rather than "flash sales". Mining enterprises, especially diversified mining enterprises, only sold minority interests in non mining businesses

compared with the investment behavior of the top 40 mining enterprises, Chinese enterprises are very unique. During the mining downturn, Chinese enterprises showed great advantages that mining enterprises in traditional and emerging countries did not have - easy access to a large amount of capital. 1. According to the report on the tensile properties of high molecular polymers, Chinese enterprises have abundant funds and are able to purchase assets at advantageous prices, and act more quickly at the bottom of the price cycle. Dodd predicted that Chinese enterprises have a strong interest in overseas mining assets, which is likely to continue in order to reduce and get rid of dependence on imports

the digital revolution brings new development to mining industry

acb News reported that new technologies are expected to promote the development of mining industry, including software to optimize asset utilization, equipment for remote monitoring and operation control, and robots to automatically complete repetitive tasks

"high end technology has been put into production on a large scale, and miners have seen the benefits of new technology in safe production and improving efficiency." Dodd said driverless trains are beginning to be used. The unmanned aerial vehicle is put into use to conduct mine safety and environmental impact assessment. Technology and innovation will bring continuous and progressive benefits