— The following are the latest findings of the Mining Recruitment Group’s Executive Survey, which was distributed and completed during the first two weeks of December 2009. This survey is the fifth in a series put together by the firm to address issues specifically related to the mining industry, with 74 executives taking part.
The Executive Survey is intended to be an assessment of the strength and viability of the mining industry as a whole over the short and long term; an objective analysis of the major issues (new and old) faced by those in the resource sector; and a look at the leadership strategies employed as the market recovers.
This year is starting out on a stronger foot than was the case as we headed into 2009. For the first time since we undertook our research, access to capital is no longer the number one issue concerning executives — a good sign, as 49% of those that participated in our November 2008 survey were running on fumes, focused purely on survival. This shift demonstrates that 2010 will be focused less on the restructuring many companies had to dwell on in 2009, and more on getting back to business as usual.
The optimism was clear in our survey: 70% of respondents said they believe the mining industry will perform better over the coming 12 months than the last 12 months.
They also believe that short-term, the picture is getting brighter, with 91% of those polled either bullish or neutral as to their 6 to 12-month outlook on the industry.
And long-term, sentiment seems to be even better. A whopping 78% have a bullish and promising outlook on the industry from a long-term perspective.
According to executives, gold (60%), copper (65%) and uranium (35%) will be the best performers among commodities in the coming year. The least dazzling commodities? Those would be zinc (48%) and nickel (39%).
Only 64% of executives said their companies are as focused on maintaining cost-cutting as they were six months ago. This is down dramatically since our last polling in August 2009, when 88% of respondents were actively focusing on reducing costs.
As access to capital eases, in what areas are companies first putting it to use? The most popular answer was “expanded focus on exploration and development” (87%); followed by “a hunt for acquisitions” (39%); and lastly, “the reversal of salary and incentive pay cuts” (21%).
What area will be the last to feel the restraints on the purse strings? That would be investor relations and marketing, with only 9% of respondents indicating that this will be among the first things they focus on as they get back on track.
Companies are plan to spend more in 2010 than they did last year: 68% indicating they would put more money into exploration and development; 38% saying they would increase staffing levels and reverse salary cuts; 23% indicating spending would increase across all levels; 20% eyeing mergers and acquisitions; and 18% planning to put more money into their investor relations budgets.
As for the number one issue executives see the industry facing over the next 12-24 months, 71% indicated that they were cautious to extremely concerned over the volatility of commodities prices. Down from 85% at the time of our last survey, only 63% of respondents indicated they were cautious to extremely concerned about a lack of investment capital.
Only 48% of executives say that their companies are executing the same business strategy during the recovery as the one they were operating under pre-recession.
Some 58% of respondents indicated they are expecting to recruit over the next six months.
As respondents indicated that the first place money would go would be into exploration and development, it makes sense that geologists and mining engineers will be in the highest demand. Of those companies planning to hire, 85% will be looking to add geologists to their team and 48% will be actively looking for mining engineers. The executive job market looks quite promising as well, with 28% of those companies that are hiring planning to make additions to their executive teams.
Another question we like to ask is how companies evaluate the success of an executive hire after 12 months. The top three criteria given were: a good decision-making style that fits with the team; exceeding expectations (role-specific); and an executive that has “earned respect” as an expert/leader in his or her role in and outside of the company.
Those that took part in this survey were executives from mining companies of all sizes. Of those polled, 54% came from companies with market caps below $50 million, 27% from companies between $51 million and $250 million, and 18% from companies with market caps in excess of $251 million. Though the findings are not scientific in nature, it is our belief that they reflect an accurate cross-section of the industry. — The author is president of the Mining Recruitment Group, a Vancouver-based boutique executive search firm focused on the unique needs of the mining industry. He can be reached at
apollard@miningrecruitmentgroup.comor www.miningrecruitmentgroup.com.
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