Global mining output and metals prices are expected to recover “strongly” within the next four years with room to manage oversupply, higher value being placed on cost-and-savings management, and optimism for new projects, an international metals market expert said on Wednesday.
“Zinc, tin, nickel, in particular, will recover very strongly in terms of market prices,” Julia Ralph, principal consultant at CRU The Independent Authority, Hong Kong, an independent mining consultancy, said during a data presentation at an annual mining conference held in Manila.
Ralph also sees lead and copper global market prices improving slightly.
The conference is a three-day event organized by the Chamber of Mines of the Philippines (COMP) from Sept. 15 to 17 at the Solaire Resort & Casino in Manila.
Ralph said international metals prices will recover despite what she calls “multiple threats” to the global mining industry because of the following factors: “room to manage oversupply, more value being placed on cost and savings management, and optimism for new projects.”
“Mining companies are facing multiple threats such as slower demand growth, flexible competitors, new low-cost production, and competition in managing project costs.”
“There is oversupply but for base metals this oversupply is limited; and there is still limited appetite to invest in high risk new mines,” Ralph said.
The key, according to Ralph, is “limited sustainable and cyclical cost savings” or simply put, managing project costs.
Chamber of Mines of the Philippines (COMP) President Philip Romualdez said threats such as the flexibility of certain competitors, as well as competition in managing project costs, are areas that the local mining industry and the national government could work on jointly for the country to become a ‘prime mining investment’ destination.
“The Philippine government must help current and prospective mining projects and investors manage costs and be flexible amid competition by ensuring there is stability and consistency in mining policies and regulations, especially in the fiscal regime,” Romualdez said.
Romualdez said developing the Philippine’s vast mineral resources also entails “partnership between the government and the private mining companies and investors.”
“Our country has the potential to benefit hugely from the recovery of metals prices by 2019 but we have to stabilize our mining industry with consistent policies and regulations so investors can help us develop our mineral resources properly,” he said.
“We have been talking about inclusive growth goals and we believe the Philippine mining industry can contribute a lot toward attaining those goals; but we have to be practical about the dynamics of how global markets and the economy work, like we have to have certain sound fundamentals for the mining industry.”
The executive stressed one of such fundamentals would be “to have a mining fiscal regime that would encourage foreign investors to gamble on large financial, environmental, and social costs needed to put up a sustainable minerals development project in the country,” Romualdez added.