Analysis of key value drivers for major mining companies for the period 2006-2015

This paper notes some key findings. Revenue, commodity price and EBITDA multiple are primary drivers of value across all four companies, despite their different commodity mix. Of these three drivers revenue is the strongest value driver. It was also noted that the two debt metrics, gearing ratio and net debt to EBITDA, only correlated with EV in times of declining commodity prices and revenue, indicating that value drivers can change with changing economic conditions. It is therefore important for mining companies to periodically identify key value drivers of company value during different economic periods and ensure that they measure their performance based on these.