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Mining: Balancing risk and reward


The ninth in the series: CFOs in the mining and raw materials sector must deal with daily risks

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“In this context of cost and schedule pressure, mining and metals companies delivering a portfolio of capital projects face a growing level of execution complexity and risk,” Paul Mitchell says in the EY report.

With such huge sums of money at stake, CFOs in the mining and raw materials sector must be on their guard, because, while Twain’s observation may not be truly accurate today, mining is an industry pitted with risk.

Top 10 mining trends for 2012

1. The cost of doing business: With commodity prices surging, accelerated production has become the mantra of most mining companies. The result is an increase in costs across the board.

2. Commodity-cost chaos: On top of prices being high, prices are volatile, making informed decision making in need of forecasting capabilities that “many companies lack”.

3. The battle to keep profits: Large public deficits are tempting governments around the world to increase tax, and the mining sector is a key target.

4. Restless stakeholders: As mining companies are increasingly in the media spotlight the need for transparency has never been so great. Corporate social responsibility is at the top of the agenda.

5. Labour pains: There is a chronic lack of the required skills in many of the far-flung regions mining companies are now doing business in. [Source: Deloitte]

Read also:

The first in the series - Media & Entertainment: The challenge for CFOs is to stay on top

The second in the series - Communications: Where CFOs face an uphill battle in an ever-changing industry

The third in the series - Retail: CFOs find their priority is all about the data

The fourth in the series - Financial services: The problem with bankers and regulators

The fifth in the series - Oil and Gas: Big gains but a high risk game too

The sixth in the series - Transport: Life in motion is rarely dull for finance chiefs

The seventh in the series - Manufacturing: Sparking a quiet revolution

The eighth in the series - Consumer goods: Recognising the need to improve forecasting

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Mining: Balancing risk and reward
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