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Current mining ‘boom’ very different from last one – CRU

JOHANNESBURG (miningweekly.com) – A return of capital expenditure (capex) and inorganic sources of growth are seen as a key corporate priority for 2018 and beyond, CRU Group senior consultant Aleksander Popovic said on Wednesday.

The provider of marketing intelligence to mining told the Junior Indaba that the company’s 200-response April survey showed that the managing of supply-side fundamentals such as technology, productivity and labour relations was viewed as an equally important current corporate theme.

Overall, the results of the survey suggested that sector-wide optimism is building, spurred by rising concerns over trade policy and geopolitical tension.

Despite some price divergence across the commodities basket in the last year, Popovic described the turnaround in fortunes for the mining and metals industry as being “remarkable”.

At the conference, attended by Mining Weekly Online, he outlined the turnaround trend as continuing and intensifying.

In the last 12 months, the FTSE 350 mining index had climbed 20%, sector revenues were up 25% and profits had soared by a huge 50%.

Dividends had made a major comeback and leverage ratios were expected to halve.

Optimism had returned and many commentators were talking about another commodity boom, which was so if booms were defined as the number of bulls significantly outweighing bears.

More than 80% of CRU survey respondents were optimistic, up from 52% on the survey of a year ago.

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