Initial 2020 guidance for 20 leading miners pointed to a possible 11% increase in their collective expenditure to US$54.7bn. However, after a series of mining companies have revised their guidance, the total has dropped back to just US$49.1bn, a fall of over US$6.5bn and below the US$49.3bn spent in 2019.
These include Rio Tinto reducing its capex guidance to between US$5-6 billion, down from the previous guidance of $7 billion, partly due to COVID-19 and partly due to the strength of the US dollar. Anglo American is cutting its 2020 capex expectations by US$1bn to US$4-4.5bn while Glencore is making a reduction from US$5.5bn to between US$4-4.5bn, due to project deferrals, lower production and falling input costs. Further major reductions are being made by Freeport-McMoRan, which announced a cut in capex from US$2.8bn to US$2.0bn, and ArcelorMittal, which has reduced its capex guidance from US$3.2bn to US$2.4bn.
Smaller reductions are being made by Vale (US$5bn to US$4.6bn), Antofagasta (US$1.5-US$1.3bn) and South32, which announced cuts of US$160m over the next 15 months, of which US$150m would be sustaining capex and US$10m exploration capex. This equates to a 10% reduction in FY2020 capex and 18% in FY2021 capex.
Outside the top 20, Agnico-Eagle has reduced its capital expenditure for 2020 from US$740m to US$690m and First Quantum is reducing its capex from US$850m to US$675m.
Capital expenditure for leading mining companies, 2010 to 2020
A survey conducted across over 300 mine sites by GlobalData indicates a large share (48%) of mine managers and other senior mine-site personnel expect COVID-19 to have a high impact on capital expenditure. While an additional poll undertaken by Mining-Technology.com found a similar expectation with 46% stating they expected a high impact on capital expenditure from the current COVID-19 crisis.