TORONTO (miningweekly.com) – The outlook for the global economy, infrastructure development and mining is not as dismal as many might believe, Deloitte global mining leader Phil Hopwood recently told an audience at the Canada-South Africa Chamber of Commerce’s seminar on infrastructure in Southern Africa.
“People talk about doom and gloom, but it isn’t all that doomy or gloomy. We can talk ourselves into corners by saying things are pretty bad,” he cautioned. “I’d say that you’ve got to focus on the long-term fundamentals and I am optimistic.”
Despite the volatile global economy, the positive drivers for metals and mineral consumption had remained in place over the long term, particularly based on developing economies that had growing rates of urbanisation.
China was important in this regard, although Hopwood also highlighted countries such as India, Indonesia, Mexico and Brazil and the volume of commodities these nations would require to build out their infrastructure on growing urbanisation rates. Countries such as Saudi Arabia were also noteworthy, achieving higher rates of urbanisation and developing large projects, including smelters.
By 2030, it was estimated that 9% of the world’s population would live in 41 megacities, while the level of global urbanisation was expected to reach 66% by 2050, according to the United Nations. “I’m always wary when seeing things that go out to 2050, but there’s no doubt we have a gigantic population move into urban centres. That’s a good thing for commodities and demand stemming from urbanisation,” Hopwood added.
He stated that current market conditions also held advantages, highlighting gold as an example. The price band between $1 100/oz and $1 200/oz had worked in favour of Australian and Canadian producers, Hopwood said, making a step-up on sales in US dollars, because of currency devaluation in the Australian and Canadian currencies.
“There are quite a few Australian miners that have it pretty good. That’s because their prices are [returning] something like more than A$1 500/oz. And if they’re not making money at that [price point], then I don’t know what they’re doing,” he noted.
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