Metals executives optimistic about survival - KPMG

The global metals and mining sector has been facing challenges amidst a backdrop of economic uncertainty. However, a recent survey conducted by KPMG suggests that there is a sense of optimism among metal executives, who believe that not only can they survive, but also grow in the medium term. Jacques Arasmus, the global head of mining at KPMG, shed light on the key findings of the survey during a recent CNBC Africa interview. The survey, which focused on both metal manufacturers and mining companies, highlighted several key areas of interest. One of the main points of focus was the outlook on the global economy. While only 14% of executives expressed confidence in the global market growth over the next two years, 30% were optimistic about beating the market in their own sector. This contrast underscores a cautious yet hopeful sentiment within the industry. As mining companies navigate challenges such as consolidation, production declines, and debt reduction, Arasmus emphasized the importance of strategic decision-making and investment in projects with strong cash flow potential. Additionally, the survey revealed a focus on technology as a key driver of future growth in the sector. Many respondents expressed a preference for investing in robotics and other technological innovations to improve safety and performance. Arasmus suggested that technology will play a crucial role in boosting production efficiency and overall profitability for mining companies. The survey also indicated a trend towards market expansion, with executives eyeing opportunities in emerging markets such as Asia and South America. This strategic shift towards geographic diversification aims to capitalize on new market segments and enhance proximity to customers. While the current market conditions may present challenges, Arasmus remains optimistic about the future prospects for various commodities. Gold miners, especially in South Africa, have seen a reprieve due to favorable price movements, providing breathing room for strategic investment decisions. In contrast, nickel and copper sectors are facing demand challenges and low prices, while coal markets grapple with sustainability concerns. Despite these sector-specific challenges, steel manufacturers are optimistic following a price upturn in 2016. Arasmus highlighted the importance of strong balance sheets, consolidation, and government support as critical factors for survival and growth in the global metals and mining sector. He emphasized the need for continued investment in developing strong cash flow projects and leveraging technology to drive operational efficiency. Looking ahead, executives are exploring opportunities for market expansion, focusing on both current and new markets to drive growth and enhance competitiveness. As the industry continues to navigate dynamic market conditions and technological advancements, strategic decision-making and operational agility will be essential for companies seeking to thrive in the evolving global metals and mining landscape.