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A world survey by Citi Global Mining shows that for the first time in nine quarters, more mining companies expect to increase their capital expenditure over the next 12 months than those planning to lower it.
It is more so for copper and gold. The outlook for iron ore has deteriorated sharply after the plunge in prices over recent months. Tha for coal remains weak but has improved slightly since the previous quarter.
Copper and iron ore prices are at a several-year low. Iron ore has been falling for some time, with prices having almost halved in the past three-odd quarters. Copper is trading around the cost of production for many mines.
Those planning to raise their capex have risen from 33 per cent in the earlier quarter to 46 per cent. Those planning to lower their capex fell to 37 per cent, from 42 per cent earlier.
More respondents, 54 per cent, said they would increase the capex in the year after. “2016 continues to be the big year for capex, with 54 per cent of the miners planning to substantially increase” it, said the Survey.
It suggests a sharp improvement for capex in diamond mining and a deterioration on that for iron ore.
