Re: [wanabidii] Mining industry in ICU...

Hali mbaya

Sent from my iPhone

On Jun 28, 2013, at 10:19 PM, JPM <jmataragio@yahoo.com> wrote:

Denis,

 

It is true; the mining industry is currently passing through a critical stage. However, the good news is that we are at the very bottom of the cycle. I predict that soon or later we will start seeing some lights at the end of the tunnel, that means commodity prices will start going up again, exploration and acquisition will also resume.

 

A million dollar question now is for how long the industry will stay at the bottom?  

In comparison with the last two cycles of poor mining performance (late 1990's and 2008) which were mostly driven by the poor performance of the world economy, this cycle is different in a sense that even though the overall world economy is doing fairly good (for most countries) but yet the mining industry is performing very poorly. Of course you have China, Brazil, Argentina and parts of Europe economies slowing down.

For those oldtimer in the industry they will agree with me that what is behind the current downturn is rather an intrusion of inexperienced decision makers mixed with the obstruction of investors in making technical decisions. Last year and part of this year alone we have seen all major mining companies (BHP, Vale, Rio Tinto, Anglo, Xstrata, Barrick etc) replacing their top management with people who have little or no prio experience in the field of mining, mostly from financial sector (with all due respect)

 

Since the last cycle we have witnessed several major decisions that were made to a great extent by pressure from investors regardless of the set principles and practices of mining and exploration, it is all about making PROFIT. Companies have become more fanatical in profit making and are focusing more and more on quarterly basis evaluations of their projects instead of looking at the potential and quality of the projects.

 

These companies through their decision makers, pressured by investors have chosen to ignore the basic principles of mining/exploration, for example they have failed to understand that exploration is a process and any short cuts as a result of lack of funding or proper technical know how, will most likely result into delaying the project or missing the ore discovery altogether.  

 

On average it takes up to 10 yrs from discovery to production for gold and most metal deposits, so when the investors happen to be part of the exploration team and decision makers at the same time it become so difficult to generate and bring into production projects that because of their geological settings require a significant amount of time and funding to carry out proper feasibility studies.

 

For example, I happened to be one of the first exploration geologist to work at Buzwagi (now Barrick Gold Mine) Gold Project (by then was famously known as Chocolate Reef, ask James Malima why??) that was back in1994. It took us over 7 years (1994-2001) to come up with some initial measuarable resource (3Moz) and the project did go into full production until 2009, for a total of 15 years.

 

At the end of the day what we see is less and less ore discoveries, less investors putting money in the industry (labelling the industry as high risky), lack or difficulties in financing for junior companies consequently less exploration. Therefore many cash stripped companies are trying to survive by cutting back on employess, exploration, projects, selling assets etc. etc.

 

Denis if you are a Project Manager, my good advice to you is that, this is not the time to lay off your best exploration team. You have  definitely come a long way to get to where you are now, a few months things will pick up again. This is the time to start building up your exploration team preparing for the next BOOM next year. Good luck! 

James Mataragio

 

---

From: denis Matanda <denis.matanda@gmail.com>
To: mabadilikotanzania <mabadilikotanzania@googlegroups.com>; wanabidii <wanabidii@googlegroups.com>
Sent: Friday, June 28, 2013 6:38 PM
Subject: [wanabidii] Mining industry in ICU...

Wapendwa,

Mining industry inapitia mojawapo ya vipindi vigumu zaidi kuwahi kuvipitia. Gold price imeshuka kwa karibu 500USD kwa ounce na Nickel na iron ore nazo zimeshuka kwa kiasi kikubwa sana. Barrick wanapunguza watu mpaka kwenye corporate offices zao.

Sijui ni migodi mingapi itavuka salama na itavuka baada ya kufanya maamuzi ya namna gani. Tujiandae kwa bad news from ABG  kuna Geita gold mines. At 1250usd/oz ni migodi michache sana itaweza kusimama.

Tusubiri....

--
Send Emails to wanabidii@googlegroups.com
 
Kujiondoa Tuma Email kwenda
wanabidii+unsubscribe@googlegroups.com Utapata Email ya kudhibitisha ukishatuma
 
Disclaimer:
Everyone posting to this Forum bears the sole responsibility for any legal consequences of his or her postings, and hence statements and facts must be presented responsibly. Your continued membership signifies that you agree to this disclaimer and pledge to abide by our Rules and Guidelines.
---
You received this message because you are subscribed to the Google Groups "Wanabidii" group.
To unsubscribe from this group and stop receiving emails from it, send an email to wanabidii+unsubscribe@googlegroups.com.
For more options, visit https://groups.google.com/groups/opt_out.
 
 

--
Send Emails to wanabidii@googlegroups.com
 
Kujiondoa Tuma Email kwenda
wanabidii+unsubscribe@googlegroups.com Utapata Email ya kudhibitisha ukishatuma
 
Disclaimer:
Everyone posting to this Forum bears the sole responsibility for any legal consequences of his or her postings, and hence statements and facts must be presented responsibly. Your continued membership signifies that you agree to this disclaimer and pledge to abide by our Rules and Guidelines.
---
You received this message because you are subscribed to the Google Groups "Wanabidii" group.
To unsubscribe from this group and stop receiving emails from it, send an email to wanabidii+unsubscribe@googlegroups.com.
For more options, visit https://groups.google.com/groups/opt_out.