Evaluation of mining companies by investors

Daniela Marasová, Martin Bittner, Peter Bokša, Peter Maras, Ľuboš Caban, Omar Mohamad Abdulhafiz Mhemed

Evaluation of mining companies by investors

Číslo: 4/2018
Periodikum: Acta Montanistica Slovaca

Klíčová slova: mining industry, investments, private equity, business risk, investor, gross domestic product

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Anotace: The present time of economic crisis overcoming is influencing also mining industry when companies are fighting with high

indebtedness. High level of debt means a number of mining companies started to have big problems, a decrease of production and a single
recession. One of the possible ways to solve the situation is private equity, which has a single impact especially to the mining industry.
Contribution provides an evaluation in the area of PE investors in the mining industry with the aim to compare the performance of the
mining industry with PE participation, attractiveness and total impact to the mining companies. The goal was to find out if PE means benefit
for the mining industry and if so, what are benefits, reflecting in the performance of the company. The determined goal was achieved by a socalled micro index that could according to analytical results and evaluation of mining companies present certain informative structure about
individual parts of the companies and to which measure these parts are qualitatively managed from the view of PE investor. Results of the
analysis show that PE in the mining industry records better results than companies without PE participation. Through analysis of the mining
industry, we found out the mining industry achieved better performance than the whole European industry. PE acting in the industry had a
positive impact on the mining companies. The situation can be solved through simple micro index and summary of individual risks, which
mining company should avoid with the aim to increase attractiveness for PE investors and at the same time to increase the stability of the
company.