The influence of renewable energy on the market value of mining companies

Hillig, Thomas

2014

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The recent past was rather difficult for mining companies as commodity prices fell considerably; in 2013 for instance, gold fell by 40%, iron ore by 8% and nickel by 27.6%. The falling commodity prices had a direct impact on the revenues and profits of mining companies. The market capitalization of the largest 40 global mining companies declined in 2013 with net profits falling 72% to $20 billion, an extreme descent. The market capitalization of the top 40 mining companies fell by $280 billion, which translates into 23%, to $958 billion at the end of 2013. Energy cost are becoming increasingly important in mining operations. First, the majority of easily accessible sites have already been exploited, which makes it necessary to dig deeper; therefore, more energy per unit of raw material is needed. Second, the energy prices have increased considerably during the last few years. This trend is expected to continue and accelerate in the following years. This study examines whether a renewable energy commitment for mines could have a direct impact on the stock value of mining companies. The study looks at direct factors such as energy prices and indirect factors such as environmental image and perceived management quality.

Energía eólica; Energía solar; Generación de energía; Impactos económicos; Sector minero;