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

http://www.mineweb.com/

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: http://www.mineweb.com/regions/canada/light-end-tunnel/

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