Price Water House Coopers (PwC) says in 2018 the top 40 mining firms paid a total of $15.5 billion in net borrowings, resulting in the gearing position dropping below the 10-year average.
According to the 2018 PwC mine report, all liquidity and solvency ratios improved during the year, leaving the world’s largest miners with strong balance sheets and cash flows.
The reports said in line with expectations, capital expenditures started to rise again, albeit from historically low levels.
It said the 13% increase over the previous year to $57 billion suggests that miners are continuing to proceed cautiously; approximately half of the capital expenditure in 2018 was for ongoing projects.
The Reports further said Copper and gold dominated spending in 2018, attracting $30 billion of investment.
Capital expenditure on coal was consistent, year on year, and we expect miners will maintain current production levels while the coal price remains high.
The report further said an 11% lift in operating cash flows has allowed the Top 40 to increase shareholder distributions in 2018 to a record $43 billion. Dividend yield for the year was 5.5%.
There was a notable jump in share buybacks to $15 billion, up from $4 billion in 2017. Rio Tinto and BHP accounted for 70% of the total activity returning proceeds of non-core disposals to shareholders.
In 2018 the share of value distributed to governments in the form of direct taxes and royalties increased from 19% to 21%. Employees received 22% of the total value distribution from the Top 40.