The first half of 2014 is history and, despite all of the
moaning from groups not actively involved in mining and
mineral processing, the mining business has stabilized
from the shakeout it experienced starting in 2013. The
news department and the opening spread (See Leading
Developments, p. 4-5) in particular showcase the cur-
rent state of the mining business.
E&MJ; leads off this
month with the best news South Africa could have
received, which came toward the end of June when strik-
ing platinum miners agreed to return to work. Hopefully, they have reached a
lasting agreement and can begin working toward restoring that segment.
E&MJ; also provides a synopsis of a PwC report, titled Mine 2014: Realigning
Expectations
. The report summarizes what the mining industry experienced
recently by analyzing the top 40 mining companies by market capitalization. In
it, PwC said the global mining industry has endured one of the most difficult
operating environments "in recent memory." That qualifier prevents compar-
isons with the 1990s, 1980s and farther back for longtime
E&MJ; readers. They
make this evaluation based on the lack of mergers and acquisitions (M&A;) activ-
ity, the number of ousted C level executives, and falling metal prices. A lack of
M&A; activity should correlate to stability. Seeing a dozen or so CEOs lose their
jobs is not a sign of a healthy industry, but the industry should also look at who
kept their jobs and why. Yes, metal prices, particularly gold and silver, slid in
2013. So far this year, prices have stabilized for precious metals and non-fer-
rous base metals. Iron ore would be the exception that proves the rule.
Oversupply has had a big impact on prices and iron ore is the largest segment
of the mining business on an investment basis.
What will happen in the second half of the year? To gain some perspective,
readers should take stock in what's happening around them. The uprising of mil-
itant Muslim fanatics in the Middle East could impact the price of oil and gold.
The situation with Ukraine and Russia could worsen, impacting some commodi-
ties, such as coal, iron ore, potash and nickel. For the moment, Chinese growth
has slowed. The questions surrounding Indonesia are starting to have an impact
(See Newmont Suspends Operations at Batu Hijau, p. 20). The previously men-
tioned oversupply of iron ore (and coal) is hurting the Australian mining sector.
On the bright side, the U.S., Japan and Germany are seeing manufacturing lev-
els grow again. Similarly, for the most part, the mining business is steady
throughout Latin America, the U.S., Canada and the Nordic Region.
Getting back to that PwC report, it also asks: Who will be bold enough to
thrive during these times?
E&MJ; routinely showcases bold leaders in the mining
business. This month, that group would be Sibanye Gold (See Sibanye Sets its
Sights on Burnstone, p. 50). Spun-off from Gold Fields, over the last year the
company has established an enviable position as a low-cost gold producer. They
acquired Burnstone, a troubled South African gold-mining operation, which has
the potential to drag the company's earnings down. Sibanye believes they can
make the mine work using a more selective mine plan. When asked why they
would risk what they have worked so hard to establish, the answer was simply:
How could we not?
Steve Fiscor, E&MJ; Editor-in-Chief,
sfiscor@mining-media.com
www.mining-media.com
ENGINEERING AND
MINING JOURNAL
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The Mid-year Report
2 E&MJ; • JULY 2014
F R O M T H E E D I T O R
Editor-In-Chief—Steve Fiscor, sfiscor@mining-media.com
Managing Editor—Russ Carter, rcarter@mining-media.com
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South African Editor—Gavin du Venage, gavinduvenage@gmail.com
Australian Editor—John Miller, john@asiaminer.com
News Editor-Mining—Joseph Kirschke, jkirschke@mining-media.com
Assistant Editor—Jennifer Jensen, jjensen@mining-media.com
Graphic Designer—Tad Seabrook, tseabrook@mining-media.com
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Steve Fiscor/Editor-in-Chief
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