Global Metals and Mining Outlook 2016: Looking for new opportunities

Looking for new opportunities

"While most metals organizations seem to believe they will grow their market share, the reality is that – without significant structural consolidation across the industry – they will need to steal it away from their competitors," – Eric Damotte, Global Head of Metals, KPMG International


Also on

Many metals and mining organizations are already fighting off fierce competition from lower-cost imports in their home markets and reduced demand from the emerging markets. And with growth in the global economy expected to remain slow, metals and mining organizations are increasingly focused on growing their existing markets and product lines.

building market share

"With China continuing to struggle with massive overcapacity, particularly in the steel sector, we expect investments to focus largely on shifting manufacturing operations towards higher-quality products to respond to China’s own shift towards value-added manufacturing," notes Eric Damotte. "China may make tons of steel, but very little of it is currently at the quality required by – for example – China’s growing automotive industry."


Indeed, our data indicates that metals organizations are refocusing their investments into driving growth in their larger markets – China and the Americas in particular. Forty-six percent of metals organizations with existing investments in North America say they will 'significantly' increase investment in that market over the next 2 years while 57 percent of respondents with investments in China also say they will grow their investments significantly.


While mining organizations are not able to shift their locations or their seams of ore, our experience suggests that miners are increasingly looking further afield for acquisitions that might improve their efficiency or diversity. "We will certainly see some M&A in the sector over the coming years, particularly in certain geographies where miners are looking to build scale," notes Sharman. "However, there continues to be a significant bid/ask price gap as potential purchasers look to take advantage of the low price environment to negotiate for lower valuations."

looking for better cost structure

Metals and mining organizations are certainly thinking about how to create the optimal footprint to match their expectations for future growth, but they are also highly focused on consolidating operations into lower-cost jurisdictions that provide access to customers and reflect evolving trade barriers while also helping manage margins. As such, we expect to see further asset restructuring as metals organizations start to execute on their investment strategies.


How are leading metals organizations responding? 

  • Rethinking their global footprint to growth markets while taking advantage of opportunities for improved cost structures
  • Aligning their growth investments with expected shifts in customer footprints as key sectors – such as auto-body manufacturing – move closer to customers in lower cost and growing destinations
  • Understanding the impact of new and emerging trade tariffs, barriers and protections within key markets and reassessing the make versus import equation.


How are leading mining organizations responding?

  • Exploring opportunities to purchase high value assets in new geographic markets to improve cost efficiencies or drive scale
  • Rigorously assessing the potential risks involved in new acquisitions to improve project certainty and confidence around earnings and cash flow
  • Continuing to reshape their portfolio of assets, products and markets to create the optimal footprint for sustainable growth.


> Read full report (PDF 2.6 MB)

© 2022 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.

KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal entity. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. For more detail about our structure please visit

Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

Connect with us


Want to do business with KPMG?


loading image Request for proposal

Save, Curate and Share

Save what resonates, curate a library of information, and share content with your network of contacts.

Sign up today