Mine 2011: The game has changed

Game-changing trends
Over the course of the last year, global economic and
political trends have changed the industry. The mining
industry finds itself in a new era and there is no turning
back. Emerging markets are leading bullish long-term
demand projections while supply remains constrained,
with challenges such as declining grade and more
remote locations. The cost curve has shifted up,
continuing to put pressure on the industry to maintain
financial discipline. New players are emerging and the
industry is receiving more attention from its many and
varied stakeholders. The game has changed in the mining
industry.
Leading the way
Mining companies have continued to outperform the
overall market, as consumer sectors dependant on
demand from developed economies struggled to
recover. While the industry was hit hard by the global
financial crisis, mining companies have led the return
and gone beyond.
Global indices (February 1989=1)
9
8
7
6
5
4
3
2
1
0
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
Dow Jones
FTSE
HSBC Global Mining Index
Source: Bloomberg.
2010 saw real tension in the market as growth
rebounded, offset by a number of incidents that kept
caution and risk on the agenda. Emerging countries
continued to storm ahead, with demand for resources
driven by strong GDP growth, including close to 10%
growth in China.
These results were achieved against a backdrop of natural
disasters, including the Chilean earthquake and floods in
Australia. Political pressure increased with reviews of
Mine–The game has changed 3