Miners Planning 20% Cut to CapEx as Production Outpaces Demand (GDX) (BTU)
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Miners are looking to spend less in FY13 as an effort to balance volume production in a cyclic industry has taken a turn for the worst.
The Financial Times (FT) reports that the segment plans a reduction of CapEx up to 20 percent this year, as most miners have seen profits slip 49 percent to $68 billion last year.
Production increased up until last year as commodity prices continued to rise.
One recent PriceWaterhouseCoopers (PwC) report had miners' return on capital at 8 percent last year, the lowest in a decade.
Lower prices offset a 6 percent gain in volume, making 2012 the second year in a decade which didn't see an increase in revenue.
The hardest-hit group last year were gold miners, which made up about 80 percent of companies that lost the most value last year, the FT noted.
On watch today will be Market Vectors Gold Miners (NYSE: GDX), Market Vectors Junior Gold Miners (NYSE: GDXJ), James River Coal (Nasdaq: JRCC), CONSOL Energy (NYSE: CNX), Arch Coal (NYSE: ACI), Peabody (NYSE: BTU), Alpha Natural (NYSE: ANR), and others.
The Financial Times (FT) reports that the segment plans a reduction of CapEx up to 20 percent this year, as most miners have seen profits slip 49 percent to $68 billion last year.
Production increased up until last year as commodity prices continued to rise.
One recent PriceWaterhouseCoopers (PwC) report had miners' return on capital at 8 percent last year, the lowest in a decade.
Lower prices offset a 6 percent gain in volume, making 2012 the second year in a decade which didn't see an increase in revenue.
The hardest-hit group last year were gold miners, which made up about 80 percent of companies that lost the most value last year, the FT noted.
On watch today will be Market Vectors Gold Miners (NYSE: GDX), Market Vectors Junior Gold Miners (NYSE: GDXJ), James River Coal (Nasdaq: JRCC), CONSOL Energy (NYSE: CNX), Arch Coal (NYSE: ACI), Peabody (NYSE: BTU), Alpha Natural (NYSE: ANR), and others.
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