Home > Mining's turning point [op/ed]

Mining's turning point [op/ed]


We come to the end of another year and as always I take the opportunity to look both back to the year that has been and forward to what may come.

Because if a new year isn't a good time for a little introspection on the industry, then when is? 

Honestly, I have to say that considering the start of 2013 and the increased gloom that was forecast we have come out surprisingly well. 

While many of the forecast job cuts did come to bear, especially on the mining services, coal and gold mining fronts, we expected no less. 

The industry had, for two years, run rampant with over-inflated wages and costs - put simply: it wasn't sustainable. 

When you've got rivers of cash pouring from your site, buying new equipment rather than investing that more important asset- time, is easier in the short term, with no heed paid to the long term effect. 

Schneider Electric's Diego Areces put it best: "Everyone was racing to be the biggest..." 
No industry could endure such high costs and such an attitude without eventually 'right-sizing' itself. 

Which is what we saw happen over the last half of 2012 and continue into the first half of this year. 

Every day brought a new wave of cuts from miners and METS companies as they sought to cut costs where they could without cutting too deeply and still remaining competitive. 
Some managed to pull this off, others didn't. 

Exploration was one of the hardest hit, with many geologist given the cut and exploration investment falling in Queensland by around a third - a move which will save a few dollars now but will have massive repercussions in the long run.

Gold also 'rationalised', falling away from the ridiculously high levels to the point where many marginal mines no longer had the capacity to operate the way they were. It wasn't until we passed the midpoint of the year that things finally started turning around. 

Iron ore made a recovery and has stabilised at a more respectable price; companies started winning contracts again, mine expansions started happening once more. 

There was actually a bit of good news. 

Although this was marred by a number of unfortunate accidents. 

Still, things are looking a bit brighter in the long run.

Especially from the energy side, with the next huge boom predicted for the LNG and coal seam gas space, which will definitely be a boon for many of the tradies and professionals with experience in the resources sector who are yet to find another job. 

Like 2012, 2013 was also a bit of a mixed bag, and while we aren't likely to see another massive mining boom like the one just gone, we will see the mining industry coming back and strengthening over the next five years. 

Let's just try to get through the last few remaining weeks of the year with no more injuries,and ensure that everyone gets home safe.

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