Also they will have to seek new sources of capital

Mining companies are better. The final application manifests the first signes of recovery in the industrialized countries. Chinese purchases are drying up somewhat after a long period of restocking but are still at a steady pace. Prices continued to fly after the lowest in the beginning of the year, but they remain at historically high levels. Experts tablent on a new acceleration of the global demand around mid-2010.

The rally course benefits to producers. Almost all tend to raise their capital expenditure projects to deal with the new situation ahead. End October, Citigroup increased approximately 20 compared to March 2009, his estimate of increase in the budgets of investment companies in this sector subject to a monitoring of its analysts. On this basis, in 2009 and 2010, the mining groupes should mobilise their development more respectively 60 and about $ 50 billion. If remote amounts of the annual record of 2008, which amounted to nearly $ 70 billion.

Consolidation activity is also expected in advance, after falling more than 50 found this year. Beginning of September, Eric Lilford, responsible for mines in Deloitte Corporate Finance, stated that he was on a restart of the fusionsacquisitions not later than the first quarter of next year.

Everything is therefore best in the best of worlds Not so sure, according to the specialists of Ernst & Young. These external and organic growth projects must compete with a veritable "wall of debt" that it will be not easy to cross. This wall was built hastily in 2007 and 2008 to fund the most dramatic consolidation process that this industry has known for decades. End of 2008, the total net debt of a panel of 60 major companies in the sector peaked at $ 182 billion. After having grown only 5.2 between 1980 and 2003, the net debt of these firms began to run at a "surprise" rate of 25 per year between 2003 and 2008. The douche of the crisis has brutally interrupted the ride. The directions of the mineral groups are applied to reduce priority their exposure to the credit. Encrypted by Ernst & Young aims to cut the total net debt of approximately $ 118 billion in three years. This which would bring the back to its levels of before the fièvre buyer in recent years, on the amounts recorded between 2000 and 2003.

Appeal to the market

According to Lee Downham, partner at Ernst & Young focused on mining and metals, the main way that extractive companies will use to redress their balance sheets will be the appeal to the market, in the form of bond issues. Two of the five majors, Rio Tinto and Xstrata have already acted in this sense. At the same time, candidates for marriage must demonstrate great imagination to develop transaction structures less dependent credit financing. This is already the case for Rio Tinto and BHP Billiton, which apprêtent to merge their productive activities in Australian iron ore. Also they will have to seek new sources of capital. Rich sovereign funds and venture capital firms are the most currently courted. Witness, markedly, activism demonstrated the Chinese sovereign fund China Investment Corp. (CIC), is on the lookout for any interesting opportunity in the world of mines. Other groups burdened by debt, will take the path of the stock market. The rating of the leader of the Rusal aluminium, whose balance is increased by a total net debt of nearly 17 billion (of which 5 to return in four years), is in this case. It has to introduce, current December, at the same time on the stock exchange of Hong Kong and Paris.

Then there is the extensive construction of cost savings. First victims, too expensive or not sufficiently profitable projects in the current context of the market. Inevitable results of all this, the expansion of the production continued by minières companies will probably not happen in the volumes desired, because under the stress of debt reduction. Where, to the relief of the final application, a risk increasing runaway prices and formation of a new bubble.