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Strategies & Market Trends : Winter in the Great White North
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From: teevee12/2/2012 8:22:47 AM
2 Recommendations  Read Replies (2) of 8273
 
There was an interesting talk in Sydney, Australia a few months back, on the future of mining. Projecting trends over the last ten years towards mining lower grades and greater depths, the data suggests than in 10 years, assuming flat global growth, mining companies will have to process 40% more ore to produce the same amount of metals. In order to do this, and pay for the expansions, metal prices will have to double. What this should tell investors is:

1)Once again, similar to the post Vietnam war period until 2000, there will be strong pressures on mining company margins

2)mining equipment manufacturers will prosper (ie. Caterpillar)

3)junior explorers will remain an investment ghetto and consolidation will result in a much smaller number of companies comprising this sector.
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