Capital expenditure within the top 10 metals and mining companies is on the rise for the first time in 5 years. Expenditure is expected to reach approximately $35 billion in 2018, as M&As rise and commodities prices fall.

M&A within the metals and mining sector has been at its highest levels since 2012, thanks in part to landmark deals such as Barrick Gold’s acquisition of Randgold Resources at $5.4 billion. Leading companies in the industry have been unveiling growth options, raising annual exploration budgets and increasing their stakes in global projects. Company growth is imperative for providing value to shareholders, and by presenting advancement strategies, metals and mining companies are hoping to return cash to investors.

Some companies have a cautiously positive outlook, albeit short-term, as raw materials have fallen due to issues regarding the US-China trade conflict; however, there is still a demand for raw materials, as investments in exploration are continuing to take place. Weakening demand for industrial commodities is also affecting issues within the metals and mining sector.

Source: Bloomberg