A veteran mining engineer says commodity prices have turned the corner, but spending and jobs may not follow right away. Sudbury’s George Darling, who says he has worked in the business for 40 years says February marked the lowest point for nickel and copper prices.
They’ve been slowly rising since, based on consumption in the United States and China. But mining companies continue to be cautious. On Friday, KGHM announced it’s reducing the pace of development at its Victoria project in Sudbury.
Darling said companies will continue to be conservative until they’re sure the downturn is over. “Once you’re at the bottom, it’s very hard to predict how fast things are going to come up again,” he told CBC News. “Then capital spending stays slow until we see a sustainable high level of prices.”
In April, nickel miner Vale announced a cut in capital spending — and management salaries — at its operations around the world.
“It’s hard to be sustainable when the prices are probably matching what your operating costs are, so they’ve had to be very conservative and protect their shareholders as most good companies do,” Darling continued.
“[Mining companies] are managing their capital at a minimum, hoping for a rebound in the resource sector.”
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