Capital expenditure is a critical indicator of the health of the mining industry, and a key driver of business opportunities for investors and suppliers alike. This insight provides a snapshot of CRU's cutting-edge analysis of global investment trends spanning a range of bulk, base and precious metals. While investment levels are not expected to reach those observed in the halcyonic days of the early 2010's, CRU nonetheless forecasts steady investment growth over the medium term, with opportunities particularly centred on base and precious metals and in regions such as Latin America and Asia.
The current Covid-19 crisis is likely to have lasting effects on the metals & mining sector, but these are yet to crystallise and are not factored in this analysis. Going forward, CRU's core mission of monitoring markets and forecasting means they are best placed to analyse how investments will reshape.
Capex outlook is key for investors and suppliers.
Capital expenditure ("capex") is a critical indicator of the health of the mining industry, and a key driver of business opportunities for investors and suppliers alike. This information is challenging to acquire and analyse, given the multiplicity of current and prospective mining assets, technologies and data sources.
CRU has invested heavily in developing our capital expenditure forecasts, developed as part of efforts to serve to clients focused on optimising capital allocation by commodity and geography. Building on our detailed market intelligence, data and cost assessment methodologies, CRU offer independent, in depth and appropriated "risked" views of capital expenditure across geographies, commodities and project types.
Investments in precious and base metals will grow
Coming into 2020, the market sentiment on the future mining industry has degraded compare to 2019. But what does it mean for the medium-term investments? CRU expects global capex to grow at a CAGR of 2.0% p.a. over the 2019-2024 period, but levels of investments remain 35% lower than the heights of the previous mining cycle in 2011-2015. Growth will mainly be driven by sustaining capex, not development capex, as companies will keep focusing on existing operations.
Date: Mar 24, 2020