Over the last several years, after the fall of iron ore and coal prices, mining companies have reduced spending on projects and exploration. Some major firms have cut capital spending by more than half. Now some investors are pushing companies to seek growth opportunities, believing that the current strategy leads to missed opportunities. One type of opportunity is the acquisition of competitors’ mines. But with impairment charges having accumulated over the past seven years, as well as price and demand fluctuations, many companies are reluctant to buy projects until the market is more predictably favorable. According to BHP, future growth will require less investment than in the past due to higher workforce productivity and faster, cheaper acquisition of raw materials as a result of advances in technology.

Source: The Wall Street Journal