Relative efficiency measurement of Canadian mining companies

Abstract

The mining industry, one of Canada's most important sectors, is opined to be experiencing productivity issues as one of its most important issues. We perform the first efficiency analysis of Canadian mining firms using data envelopment analysis. We compute technical, managerial and scale efficiencies for a sample of 30 listed mining firms during the period 2011-2015. Our results confirm that, overall, the firms exhibit low to average technical efficiencies, largely due to managerial inefficiencies. Further, their technical and managerial efficiencies have been declining during the 2011-2015 period. Finally, sub-sectorial analysis shows that gold and diamond, gemstones, platinum and precious metal mining firms perform the best on scale efficiency, while general mining companies set the standard for managerial efficiency.