Performance
Overview
The diverse markets being served by the group's operations are all likely to be adversely affected by the global economic downturn, albeit differentially due to both geography and market sector.
Energy markets are generally least affected as electric power demand is relatively inelastic. This is especially true for low cost, base load power stations such as those fired by uranium or low cost thermal coal. At the other end of the spectrum are commodities needed to produce durable goods such as automobiles and appliances, which have seen rapid declines in sales as the effects of the downturn have spread around the world.
The Energy & Minerals group is responding to the economic crisis by focusing management attention on cash conservation. Non essential capital expenditures have been deferred wherever possible, and a range of initiatives will focus on working capital reductions, operating cost efficiencies, procurement efficiencies, and some reductions in employee and contractor numbers.
