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Bridging the gap between shareholder value and actual performance

I recently read a piece from CitiBank (March 2019) which stated that per their research, metals, mining and steel companies had destroyed around $320bn in shareholder value in the downturn between 2012 and 2016.

CitiBank believe metals and mining companies love to dig holes in the ground and justify CAPEX projects based on positive NPV (or a complex capital allocation process around NPV) but in CitiBank’s view they still miss the point that NPV doesn’t equal shareholder value." - Citi Market Commentary, 18 March 2019.

The big question for investors now is whether metals and mining companies have learnt their lessons? In Heath Jansen’s view (CitiBank analyst), the general answer is a ‘No’ and the companies could be setting themselves up for failure again.

We believe this expectation gap, creates an opportunity for MMS to collaborate with miners to help them execute on their ambitious plans which are often easier to drum up than to execute on, especially over long periods of time. MMS’s product offering is geared to improve how decisions are made with an added benefit being that any gap between actual performance and the expected results are highlighted proactively, shortening feedback loops to mitigate losses and maximise profits. We believe adding a layer of transparency around how data is shared, performance is communicated and recommendations and actions are tracked is central to improving performance.

If you are interested in finding out more about how one can leverage WIRE to make your plants smarter, to centralise how your plants are monitored and help you realise the expected NPV of digging a hole and investing significant resources, please be in contact. info@metalmanagementsolutions.com