Profitability of mining companies being eroded away. - According to the latest annual study on the mining industry by PricewaterhouseCoopers, profitability in the mining industry is starting to decline. Last year, the net profit margins of the 40 biggest mining companies fell by 2% to 26%, the first fall since 2003. The rush to invest in raw materials is putting the mining industry's infrastructure and supplies under pressure, explains PWC. In Australia, medium-sized mining companies saw their costs rise 56% for example. Leaving aside the big four mining companies, the hike in production costs is around 33%, notes the report, stressing that firms whose assets are located in emerging economies are doing better. Energy, pay, materials, transport and sub-contracting are the areas of expenditure which have seen the sharpest price rises. PWC analyst Tim Goldsmith summarises the dangers facing the mining industry as the 3Ps - people, power and procurement. The rising costs will not endanger the industry's health as long as the price of minerals remains at their current nearly record levels or above, explains PWC. (I.L. /transl.: fl)