Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr
Issue link: https://emj.epubxp.com/i/846973
88 E&MJ; • JULY 2017 www.e-mj.com MARKETS Activity in the mining industry refl ects the global economy generally and industrial production in particular. After encourag- ing price increases last year, there was a mixed performance for mined commodities during the fi rst three months of 2017. The March quarter overall saw a healthy in- crease in the price of aluminum and steady improvements for gold, zinc and copper, but flat performances for nickel and iron ore. This refl ects the uncertain political and economic environment, but, fortunate- ly, China has started the New Year with its strongest performance in six quarters. An area of apparent encouragement in the fi rst quarter was the number of initial resource announcements, which rose by one to 14. However, the total value of these new resources slumped from $62.3 billion in the December quarter to an all-time low of $5.9 billion. Base and other metals bore the brunt of this decline, falling from $52.1 billion to under $1.9 billion, with 11 of the 14 new resources being for gold projects. After improving in the fi nal quarter of 2016, the S&P; Global's Pipeline Activity Index (PAI) fell in the fi rst three months of 2017. This fall is largely attributable to seasonal factors (the index has fallen in the fi rst quarter for each of the past fi ve years), but three of the four indicators used to measure PAI — drill results, proj- ect milestones and signifi cant fi nancings — fell during the March quarter, offset by a slight increase in initial resources. According to statements made in mid-April relating to mine fi nance, funds raised in the three months to end-March totaled $9.57 billion, compared with a restated $7.14 billion in the December 2016 quarter and only $5.14 billion (restated) in the fi rst quarter of 2016. A total of 762 fi nancings have been re- ported to date for the three months to end-March, compared with 894 in the December quarter. An improved economic environment is refl ected in analysts' expectations of higher average annual metals prices this year and next. Indeed, compared with the average prices recorded last year, only gold is expected to average less this year. In 2018, only cobalt, iron ore and tin are expected to average less than in 2017 — with the fi rst two of these metals expect- ed to continue falling in 2019. This article was based on excerpts of the Q4-2016 State of the Market: Mining Report, a detailed analysis of mining in- dustry developments that includes expert commentary from Dr. Chris Hinde of S&P; Global Market Intelligence. State of the Mining Market Q1 2017 Gold and silver prices provided by KITCO Bullion dealers (www.kitco.com). Platinum group metals prices provided by Johnson Matthey (www.platinum.matthey.com). Non-ferrous base and minor metal prices provided by London Metal Exchange (www.lme.co.uk). Iron ore prices provided by Platts Iron Ore Index. Currency exchange rates were provided by www.xe.com. (June 30, 2017) Precious Metals ($/oz) Base Metals ($/mt) Minor Metals ($/mt) Exchange Rates (U.S.$ Equivalent) Gold $1,241.20 Aluminum $1,908.50 Molybdenum $16,000 Euro (€) 1.142 Silver $16.61 Copper $5,907.50 Cobalt $60,000 U.K. (£) 1.301 Platinum $928.00 Lead $2,274.00 Canada ($) 0.770 Palladium $866.27 Nickel $9,280.00 Iron Ore ($/dmt) Australia ($) 0.768 Rhodium $1,040.00 Tin $20,200.00 Fe CFR China $56.01 South Africa (Rand) 0.077 Ruthenium $65.00 Zinc $2,754.00 China (¥) 0.147