What a period it’s been in the mining industry – globally and at home!

Quite possibly not that much different from any other time; nevertheless, when one finally takes a moment to pause and reflect, one cannot help but marvel at the contradictory nature of events in our sector, rising to great heights today, toppling into the depths of depression tomorrow, and popping back up to the lofty levels of optimism the day after.

That’s the way it is in our mining environment. Let me show you what I mean.

For a start, we have just learnt from the latest PricewaterhouseCoopers (PwC) report, “Mining Deals” that the value of global mining deals fell 74% in the first half of the year. “And they are likely to remain equally bleak for the rest of 2013 and next year,” it adds.

In the report, PwC – the world’s largest professional services firm – attributes the situation to “a loss of confidence due to write-downs, market uncertainty, and falling commodity and equity prices across the global mining sector.” Three good reasons which combine to convert today’s environment from a mine camp to a mine field. Not a pretty picture.

One must remember that, despite a recent prolonged stretch of growth, the mining industry is fundamentally a cyclical business, and companies need to adjust to the risks, especially during the downturns.

So far in 2013, there have been a number of reminders – from falling commodity and equity prices to multibilliondollar write-downs across the sector, as the global economy continues to try to find a solid footing.

Glencore Xstrata – one of the world’s largest global diversified natural resource companies – is cutting costs and shelving projects. The company has closed 33 offices in three months and slashed almost half Xstrata staff in headquarters or divisional offices. It has also suspended 44 out of 88 Xstrata projects and cut back seven.

But up to US$576 million of the total – the largest slice – has come from the coal division, where miners are struggling with weak prices and oversupply. In fact almost a third of the world’s thermal coal output is said to be loss-making. Another depressing scenario.

BHP Billiton Limited, Rio Tinto Group, Glencore Xstrata plc,Vale SA and Norilsk Nickel are among rival companies cutting costs, selling assets, implementing write-downs and reducing spending to counter lower prices and weaker earnings.

Then some good news – in the midst of all this negativity comes an announcement from Maputo that minerals mined in Mozambique in the first half of 2013 rose 34% above the January to June figure for last year.

And a matter of days later, the country’s mining resources minister, Esperança Bias reveals that four more coal mining projects are due to begin in Mozambique’s Tete province between 2014 and 2019, representing a total investment of US$5.1 billion. Another two now in operation are Beacon Hill’s Minas Moatize mine and Jindal’s Chirodzi operation.

Approval of these new coal projects comes at a time when Mozambique is seeing a lot of progress in prospecting and surveying for a variety of minerals. Prospecting is underway for heavy sands in Jangamo and Xai-Xai, in the provinces of Inhambane and Gaza, respectively, as well as for graphite in Balama, Cabo Delgado province.

In another development, China Africa Sunlight Energy Limited has announced that it plans to invest as much as US$2.1 billion developing coal mines and building a 2,100-megawatt plant powered by the fuel, in neighbouring Zimbabwe.

Meanwhile back on the negative front, overall South African business confidence has declined as accelerating inflation, a weakening currency and labour strikes combine to tighten their grip.

The South African Chamber of Commerce and Industry’s business confidence index remained close to the lowest level in a decade, dropping to 90.5, and latest statistics show that almost three fifths of respondents aren’t satisfied with prevailing business conditions. “The continuing lack of economic momentum and on-going labour disruptions of the economy, particularly in mining, are important factors affecting business confidence,” the chamber said.

“Sluggish, and volatile, economic growth is probably the best we can hope for in the period ahead,” says RMB, a unit of Johannesburg-based FirstRand Limited. “Deteriorating confidence, coupled with widespread strike action, point to growth in all likelihood having fallen back to levels of around 2.5% in the second half of the year,” states the RMB report.

It’s all a rather confusing jumble of facts and figures, and I guess it leaves one uncertain as to whether one should be happy or sad about the predicament in which we find our global mining sector.

Either way, one thing is definite. The immediate future of the mining industry is not bright – here or globally – and it’s not going to clear up overnight. And even more significant here in South Africa is the need for all parties – be they mining producers, government or trade unions – to play a positive and co-operative role in righting the ship before it capsizes!