A Good Future for Miners Ahead

According to EY’s Capital Confidence Barometer, Mining and Metal Sector, the confident level in this sector has increased drastically over a period of last 12 months. When only 38% of the mining companies were focusing on growth and expansion last year about 55% on the companies are on the verge of expansion presently. EV states the main reason for this development as the increasingly stable global economy, especially in the mature markets.

During last few years the transactions in the mining and metal industry were falling down drastically. Struggles faced in capital allocation and the access to the capital challenges was stated as the reason for this down fall. Anyway the GDP growth has returned in all mature markets and this improves the credit availabilities too. Even though, the preference in this sector is still on low risk investments, which may results in mergers or acquisitions. Similarly, investors are not so enthusiastic to invest in this sector although banks and other financial institutions are ready to lend. However, this is dismissed as a fear that aroused form the experience of the past and according to experts in this sector the trend will change in favor of mining and metal sector within another six months or so.

According to the experts only 57% were of the opinion that the global economy is improving about six months back and now almost 72% believe. This clearly underlines the changing mind of people who have the ability to invest. As the time passes, the apprehensions about the mining sector also will go off from their mind and they will come forward to invest here also. Many expect.

Earlier also there were reports from different parts of the world about the improvements witnessed in this sector. Altogether it make us to believe that the miners are going to enjoy a bright future from next year onward.

Mining Jobs on a Leap in Australia

It is great news for all. In a recent study report, the research firm BIS Shrapnet has predicted a hike in the job opportunities in the mining sector in Australia. This will more in iron ore and liquefied natural gas sectors.

In their detailed study report they claim that the export of both these commodities will increase in the coming years and the GDP share of these sectors will increase from 18.7% to 19.8 %. They have earlier predicted a hike in the investments in mining sector and 2012 and 2013 witnessed that boom. According to their report this will reduce to by 20% in the coming 5 years. At the same time the mining production will increase by 41% which will increase the related activities such as maintenance and exports. These are the areas where there is a large work force is required in all levels and a large number of people with different educational qualifications will get opportunities in this boom.

According to many experts, this boom in the mining sector, which is predicted for another five years will certainly influence the economical growth of Australia. Increased production and exports will certainly pump in lot of money and other sectors such as construction, manufacturing etc will start booming using this money. Hence, there will not be a problem if a slow down happens in the mining sector after these five years.

However, the miners are not seeing any luck in this boom as they will be squeezed by the low commodity prices and high Australian dollar rates. Still they can make enough profit as the production increases.

Now it is the Turn of North Korea in Rare Earths

Rare earth elements are always in demand as they were the most important raw materials in various industries such as green house technology, defense products and consumer electronic products. Initially they were sourced from the placer deposits in India and Brazil in early 1940’s, but South Africa dominated in the production in 1950’s.  However, from 1960’s , U. S take over the regime and the major supply started coming from the Mountain Pass mine in California. This continued till 1980’s and then China entered in the market with 95% of the world’s total rare earth coming from Mongolia. China is not only the major supplier, but also became the major consumer of rare earths going ahead of Japan and South Korea. 

China’s monopoly in the production and its role as the major consumer increased the rates and after 1980’s price of some rare earth elements have gone up twenty folders high. Alarming increase in the prices sent warning alarms and the exploitation for rare earths has started world over. As a result fresh source of rare earths have been found at different places such as Canada, Green Lands, Malaysia etc. It has been found at some places in Australia too. Although it was not sufficient to meet the requirements of the world other than China, it became a reason to bring down the prices considerably. This gave a fresh breath to the industries where rare earths are most important raw materials.

Mining center in North Korea

As good news to the industry, a private firm that has been hired by the North Korean authorities has announced the finding of world’s largest rare earth source. SRE, the private firm which discovered this source has already signed a contract of 25 years to explore the resources with the Korea Natural Resources Trading Council. The joint venture company, Pacific Century Rare Earth Mineral Limited has also given permission for a processing plant at the site. The site Jongui is located about 150 kilometers northwest of the national capital Pyongyang.

Experts are of the opinion that this new development will help to bring down the prices further and this will help the different industries, especially consumer electronics a lot. Approximately, 216 million tons of rare earth deposits are believed to be here in this region which is the largest in the world.