Change in capex: Another factor has been change in the sector’s Change in the sector’s C2C and mineral prices, 2007–13 level of capex, with companies accelerating investments to grow 150 60 capacity and improve infrastructure. For the mining companies 140 in our survey, overall capex jumped from 13% of sales (or US$67 billion) in 2007 to 22% in 2012 (US$156 billion). This 130 proportion then fell back to 19% (US$134 billion) in 2013 as 120 50 the sector sought to contain costs and focus on those projects x110 s providing the best returns. Rising capex leads to higher DPO. 100 y Inde Da Change in the sector’s capex in value and percentage of sales, 2007–13 90 80 40 25 200 70 60 20 50 30 150 2007 2008 2009 2010 2011 2012 2013 s sale15 Metals price index C2C o 100 x t US$bCommodity Minerals Price Index, Dec 2007 = 100, includes aluminium, copper, iron ore, lead, ape10 nickel, tin, uranium and zinc. % c Kgmj[]2AE>Yf\=QYfYdqkak$ZYk]\gfhmZda[dqYnYadYZd]ÕfYf[aYdklYl]e]flk& 50 5 Initiatives taken by individual companies: While some of the YZgn]^Y[lgjkhdYq]\Yka_faÕ[Yfljgd]af\janaf_l`]k][lgjÌk;*; 0 2007 2008 2009 2010 2011 2012 2013 0 in recent years, progress in WC performance also came from a number of initiatives taken by individual companies. Capex Capex to sales L`]k]afalaYlan]k^g[mk]\gfj][gfÕ_mjaf_dg_akla[kYf\kmhhdq Kgmj[]2=QYfYdqkak$ZYk]\gfhmZda[dqYnYadYZd]ÕfYf[aYdklYl]e]flk& chains to make them leaner and more agile, improving billing and cash collections, managing payment terms for customers Volatility in mineral prices: Variations in mineral prices have and suppliers more effectively (including renegotiation of terms), also played some part in driving the sector’s C2C. This has led leveraging and consolidating procurement, improving IT and lgYka_faÕ[Yfl[`Yf_]afZ]`Ynagjkoal`afgj_YfarYlagfk$Zml eYfY_]e]flkqkl]ek$[j]Ylaf_Yegj]mfaÕ]\k`Yj]\%k]jna[] l`]k[Yd]g^l`]ajaehY[lj]eYafk\a^Õ[mdllgYkk]kk&L`akak\m] organization, and reducing complexity in functions and processes. to a number of factors, including timing differences in passing Other actions included sharing infrastructure and coordinating on these changes to customers, futures or spot prices arbitrage transportation of products with other producers and logistics arrangements, differential between prices at year average and at service providers, and optimizing spare parts planning and year end, and investment decisions based on mineral prices. The inventory management. next graph reveals a direct relationship between mineral prices and the sector’s C2C before 2008 and between 2010 and 2013, Expectations of wider divergences in WC performance: after a period of disconnection between 2008 and 2010, affected For 2014, we expected the WC results to reveal even wider by exceptional price volatility during the global downturn and the divergences in performance between commodity groups and subsequent phase. individual companies, as some embrace more substantial and sustainable operational and structural changes in the way they address WC. The more the pain, the more urgency to gain. Changes in capex programs (with some choosing to be more selective) will be another contributory factor. Cash in the ground: working capital management in the mining sector 6