It has been widely reported that ballooning capital costs on core development projects have inspired majors to pull back on 2023 spending programs. As has been covered in these pages, disappointment over nasty cost escalations has hobbled the shareprice of many majors and helped set in motion almost as many management changes at the top.
Last year might be called the year of CEO musical chairs in the mining industry.
Now the depths to which majors are going to save pennies is becoming more apparent. On Wednesday Major Drilling, one of the largest drill service companies in the mining industry, issued a rare press release updating markets on its coming quarterlies, warning that decisions on spending programs by majors were coming slower it had anticipated.
“Subsequent to the holiday season, there have been increased delays in the decision making process on the part of many of (Major Drilling’s) senior customers in regards to their 2023 exploration drilling programs,” Major Drilling stated.
It added that the slowdown might hurt revenues. “The impact of these delays on the (Major Drilling’s) third quarter was expected and has not changed management’s views on third quarter results,” Major Drilling said. “However, given these increased delays, as well as general pricing pressures, fourth quarter revenue will be more significantly impacted than had been anticipated”