New Normality

Price slump hits mining industry hard

Summary: Low commodity prices are currently causing severe problems for mining companies. And it is not particularly likely that anything will happen to quickly change the situation, even though price developments in commodities, base metals and precious metals are different and are based on different conditions. This article deals with current developments and how the mining companies are responding to them.

1 End of a super-cycle

The rise in many commodity prices reached its peak in 2011 to 2012. After that, there were some serious price declines, like that recently seen in the case of crude oil. What happened? Since 2001, the rise in prices for commodities had become decoupled from the general economic growth. Within just a few years, commodity prices doubled and in some cases tripled. Not even the global economic downturn in the wake of the financial crisis of 2008 and 2009 could stop the upward trend (Fig. 1). This demand for raw materials was mainly driven by the appetite of China and other...

Related articles:

Issue 2016-07-08

1 Introduction At the beginning of this year, economic news sources carried the story that China intends to axe about every sixth job in the mining industry due to the substantial overcapacities in...

more
Issue 2015-12

1?Introduction About a year ago the RBTH media service of the Rossiyskaya Gazeta announced that Russia plans to mine rare earth metals on the moon. According to plans published by the Russian space...

more
Issue 2018-04 Entwicklung • Development

1 Introduction The prices of metals, like the prices for every commodity, are determined by supply and demand. However, current metal prices take into account not only direct production and stock...

more
Issue 2015-06 Australia’s mining industry in the doldrums

1?Raw materials forecasts and price decline An explanation of the global demand for raw materials is usually based on a growing world population, global urbanization and rising per capita incomes. In...

more
Issue 2016-09

1 Introduction In the non-ferrous metals sector, mining companies’ worldwide exploration expenditure fell in 2015 by 19?% to 9.2?bn?US$. Relative to the peak year of 2012, expenditure has thus...

more