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Photo: Getty Images
Photo: Getty Images

Coal India among 40 biggest mining firms with lowest returns: PwC

The average return on capital employed fell to 9% in 2014 from 9.5% the previous year, PwC said in report

Johannesburg: Investment returns from the world’s 40 biggest mining companies declined to the lowest since at least 2003 amid a slump in commodity prices, according to PricewaterhouseCoopers LLP.

The average return on capital employed fell to 9% in 2014 from 9.5% the previous year, PwC said in its 12th annual Mine report. Only six companies, including Coal India Ltd, OAO GMK Norilsk Nickel and Randgold Resources Ltd, beat the hurdle investment rate of 15% to 20%, Michal Kotze, a partner at PwC in Johannesburg, told reporters on Thursday.

“Companies are not producing the returns—that’s why you see investors leaving the sector," Kotze said in an interview. “They are essentially the same companies but with lower returns."

The world’s biggest mining companies from Glencore Plc to Anglo American Plc are closing operations or selling assets after commodity prices from coal to platinum slumped. The total market capitalization of the top 40 dropped 16% to $791 billion in 2014 from the previous year, Kotze said. Bloomberg

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