PwC Australia has released its 19th annual Aussie Mine report, offering insights into the sector’s challenges and the market value of the mid-tier 50 mining companies.
The report shows that Australia’s overall mining market value remains robust despite significant sector shifts. Additionally, the total market value of the mid-tier 50 mining companies (MT50) remained at $139 billion in 2024, reflecting resilience despite a dynamic macroeconomic environment.
PwC Australia’s National Mining Leader, Marc Upcroft, said that the resilience of the MT50 – despite the challenges faced in 2024 – underscores the strength and adaptability of Australia’s mid-tier mining sector.
“The record high gold prices have provided a significant boost, but the sector must navigate the volatility in critical minerals with strategic foresight. Lower lithium and coal prices have significantly impacted revenues and earnings, reversing the four-year trend of annual increases.”
Gold companies now generate nearly 50 per cent of MT50 operating cash flows, marking a significant shift from coal in FY23. The critical minerals sector lost its dominant position in the MT50 – representing 37 per cent of the 2024 MT50 value, falling from 52 per cent last year.
The key MT50 FY24 insights from the report include:
- Revenue was down ten per cent to $52.2 billion
- EBITDA decreased by 37 per cent to $18 billion, with margins dropping from 50 per cent to 34 per cent
- Return on equity fell to 7.5 per cent, aligning closer to long-term averages
- Capital expenditure increased by 41 per cent to $14.7 billion
- Net cash was nearly depleted, down 99 per cent to $0.1 billion
PwC analysis found that market sentiment for most critical minerals finished FY24 was lower than at the start, with copper as the standout exception.
The report found that from record highs a year ago, significant share price falls have seen seven critical minerals companies exit the MT50 this year. The aggregate market capitalisation of MT50 critical minerals companies fell by 28 per cent over the year to June 2024, while earnings were 61 per cent lower.
“Beyond the short-term uncertainty, the big picture for critical minerals is clear. There is a vital link between global decarbonisation efforts and opportunities for Australian mining companies,” said Mr Upcroft.
“For that reason, demand for critical minerals will continue to rise significantly to meet the need for lower carbon technologies. In fact, it will be very challenging for supply to keep pace with demand.”
The PwC analysis shows that less than a fifth of Australia’s current critical minerals projects are considered investable.
“There is currently a significant gap between Australia’s potential and the number of projects ready for investment,” said Mr Upcroft.
“Additionally, many of these projects lack the necessary scale, with our research indicating that few in the investable universe have a net present value (NPV) greater than $500 million. This suggests that numerous projects are either too small or insufficiently developed to attract substantial investment.”
According to the report, collaboration and innovation are at the heart of harnessing this potential.
“We need to catalyse private capital by adopting mechanisms that address price volatility and volume risk, and we need to develop mining project clusters to aggregate reserves and resources to achieve economies of scale,” Mr Upcroft said.
The PwC analysis highlights the increasing complexity and higher stakeholder expectations facing miners, which require strategic alignment across mining company strategies, customer partnerships, financial markets, government policies and community cooperation.
“There is an opportunity to generate $171bn in gross domestic product (GDP) and create almost 330,000 jobs by 2040 if we make critical choices to align our policy settings to market needs,” said Mr Upcroft.
“By addressing these strategic imperatives collaboratively, Australian mining companies are well-positioned to navigate the evolving global economy and achieve sustained growth.”
