Although years of cost discipline have repaired balance sheets from past over-spending, full-year results announcements in February are expected to show a fall in miners' earnings and in shareholder payouts from the record levels reported in 2022 after disruptions lowered output and costs rose for energy, explosives and equipment.
"Having cut back on CapEx and spending, mining companies are fine in the short term, but if they look a few years forward, they need to start developing more growth options," George Cheveley, portfolio manager at Ninety-One, said. Capital spending by mining companies is set to decrease 11% in 2023, with exploration spending likely to fall by 10%-20%, according to S&P Global Commodity Insights' principal metals and mining analyst Kevin Murphy.
Among the more bullish CEOs, Mark Bristow of Barrick Gold said mining companies should spend more on exploration to ensure a solid pipeline of mines, despite the global economy being "extremely stressed".
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