Miners from emerging markets outperformed those from developed countries by earning $24bn profits in 2013, according to the latest annual mine report by PricewaterhouseCoopers (PwC).
Mining companies from the developed parts of the world showed a net loss of $4bn, said the report, which analysed the 40 largest miners.
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The global mining industry has reported a 72% drop in net profits to $20bn in the last year, with gold, coal and diversified miners being the worst affected. The combined market capitalisation value of the 40 companies fell by 23% to $958bn.
The mine report termed 2013 as "one of the most difficult operating environments for years", due to a fall in commodity prices triggered by gold’s greatest annual decline in 30 years, the fall of mining stocks by 23% and record impairments of $57bn.
Mining companies incurred impairment charges of $57bn during 2013, an increase from $40bn in 2012, while dividend payouts rose to $41bn from $15bn during previous five years, as mining companies look to retain investors.
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Miners in developed countries were especially affected as the governments in the emerging economies are seeking an increasing share of royalties and taxes.
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By GlobalDataPwC global mining leader John Gravelle said the industry is adjusting to tough times in the short-term with strategies in place to regain confidence.
"Despite diminished profitability and shrinking cash, underlying performance in the industry as represented by adjusted EBITDA, withstood the tough conditions, only down 8% in 2013," Gravelle said.
"Dividend yields also continued to increase, with gross dividends paid up 5% and dividend yields slightly up to 4%."
Gravelle also said that the industry is witnessing fundamental shifts in strategy, such as increasing focus on extracting value from higher-quality assets, realising greater efficiencies and spreading capital and risk, and a commitment to address diminishing productivity levels.
The report forecasts that the capital expenditure in the sector will be around $116bn, which is 11% lower than 2013 as capital velocity slows.
Image: The global mining industry has reported a 72% drop in net profits, says the PwC report. Photo: courtesy of PwC.
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