As Diggers and Dealers delegates rolled in for day two of the annual mining conference, heavy heads from a late night in Kalgoorlie’s famous watering holes were unlikely to be relieved by an injection of optimism.
Commodity prices are down across the board. Since last year’s conference, base metals are down between 20 and 40 per cent, while gold is down about 15 per cent and iron ore has plummeted nearly 50 per cent during the year.
Australian domiciled gold producers, buoyed by the falling local currency, are a shining centre of attention at the conference but there are some other bright spots.
Despite a recent price slide that has forced some analysts to downgrade their price forecasts, zinc-focused companies at the conference attracted a considerable level of interest from analysts and investors at their marquee booths.
Zinc for delivery in three months has fallen to around $US1893 a metric ton on the London Metal Exchange. The price is has slid for the past three months and is down more than 20 per cent from a recent high point of $US2410 in July 2014.
Despite concerns waning demand in China will balance the expected supply cuts, Heron Resources managing director Wayne Taylor is upbeat. He said zinc is a “developing story” and is beginning to grab the attention of investors looking for strong long term fundamentals.
“The zinc market fundamentals are really great,” he said. “There is a supply side issue which is improving and despite discussions about China’s economy, globally we are consuming more zinc.
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