Light at the end of the tunnel – by Kip Keen ( – February 13, 2015)

Mineweb’s Kip Keen speaks at Mexican Roundup, sharing some hopeful thoughts about the junior market.

These are Kip Keen’s prepared remarks as the keynote speaker at Mexican Roundup in Hermosillo, Mexico:

Thank you Jackie Stephens, Mexican Roundup and GlobeXplore for having me. Ok. Buenos dias y lo siento.

I’m going to talk about the state of the mining industry. I promise, at least in the end, this won’t sound like a eulogy, at least as far as juniors are concerned. But first: What a year it’s been.

Just when you thought the mining sector, as a whole, had suffered its worst blows halfway through the year, 2014, it took some more.

By mid last year we had already been through a wave of impairments taken after overpriced boomtime acquisitions – Kinross on Redback Mining and Fruta del Norte; Barrick on Pascua; and so on.

The price of iron ore – the lifeblood of the large diversified miners – already was down by nearly half from close to $200/tonne in 2012 to about $100/tonne in the first half of 2014.

Gold had done its collapsing in 2013 as ETFs sold off and fewer, at least Western buyers, stopped worrying about impending hyper-inflation.

As it turned out the worst wasn’t over.

Iron ore prices resumed freefall as the low cost diversified producers – expanding supply – slugged it out for market share against the high-cost Chinese iron ore miners, all the while steel demand faltered.

Still a vexing situation, that.

Prices sank below $50/tonne for iron ore this year for the first time in half a decade. The big miners – BHP, Rio, Vale – had expected the price to fall, but not so hard and not so fast.

For the rest of this speech, click here: