Orica CEO Alberto Calderon has said that though he is reluctant to make predictions, based on the company’s extensive client base the mining industry appears to have stabilised.
The Australian reports that the CEO’s comments were based on the explosives company’s presence at 450 mines around the world. Calderon, who joined the company in March last year, said that miners had made necessary cuts to their cost base and revenues would benefit from US interest rate rises.
“So I don’t see things getting sustainably worse from here. That is a way of saying things are stabilising,’’ he told The Australian.
Orica itself has been adjusting its operations to meet the industry’s fortunes. The Australian Financial Review reports analyst predictions that Orica’s underlying profit will roughly halve to around $407 million for the 2016 financial year.
Of cost-cutting, Calderon told the American Chamber of Commerce yesterday that some of its customers had cut “good” rather than “bad” costs due to short-sightedness. He declined to mention names, but within Orica he said that such an example of “good” costs was money spent on R&D.