GOLD mining revenue prevented the world’s largest miners from reporting a third consecutive decline in aggregate revenue, according to a report by PwC, an auditing firm.
Revenue generated by the 40 largest companies by market capitalisation exceeded $800bn last year, it said. Excluding gold sales, total revenue fell below $700bn, which compares to $900bn in 2021.
The gold price increased 32% in 2024 and has continued to climb, gaining another 27% year-to-date, largely owing to central bank buying and retail investment flows.
Central bank purchases were unlikely to taper, according to Andries Rossouw, Africa energy, utilities and resource leader for PwC. “So gold is probably going to stay strong for some time still until we get a bit more peace in the world, or until various countries decide there’s an alternative to investing in gold in a risk-off position,” he said.
Despite a pullback in metal prices, including the spectacular decline in lithium carbonate, down $65,000 per ton to about $10,000/t today, big mining’s aggregate revenue since 2021 is elevated on a 10-year view.
Dividends and share buybacks have also been relatively stable as a result of the improvement in gold company performance. There has been a steep cut in capital expenditure as a response to lower prices, said Rossouw. Deal flow has also fallen, down from $428bn in 2023 to $245bn last year.
Rossouw said capital expenditure would continue to drop this year as companies focus on protecting free cash flow generation which increased 8% for the top 40 companies to $55bn between 2023 and 2024.
PwC forecasts a further improvement in free cash flow to $63bn this year, but he points out that this is due to cash conservation rather than growth. One bright spot, however, is that mining input costs are coming down, especially in energy.
On the energy front, Rossouw said that whilst deal-making had been on the decline generally, there had been interest in uranium assets. “There’s a big realisation that nuclear energy is a good way forward,” he said.
“If we have to get rid of emissions, then nuclear energy will be playing a big role, possibly bigger than the 10% (of the total energy market) that it’s currently supplying,” he said. The run in uranium prices last year appeared to incentivise a number of deals owing to “a need to get into uranium as feedstock again,” he said.
