Canada v Australia: No Difference in Mining Returns

On 30 November, I am due to speak at the annual Mines and Money investment conference in London. My main theme will be the changing structure of capital flows in Australia and what that means for the country’s mining industry. Although not central to the presentation, the chart below was prepared for an international audience to highlight the common macro backdrop for the industry. It illustrates the investment returns from Australian and Canadian resources companies through the course of the 2011-2015 cycle. It offers a different perspective on what has been happening than an index comparison which is often distorted by compositional effects. The chart shows the distribution of returns for all the listed resources stocks in both countries. The returns distributions (red for Australia and blue for Canada) are remarkably alike. The statistics say there is no apparent gain for a company from being listed in one jurisdiction over another. It suggests investors make no gains from international diversification.