Nickel, zinc seen leading world metal prices recovery

MINERS can look forward to better mid-term prospects as prices of metals in the world market are seen to recover by 2019, experts said at the Mining Philippines 2015, a three-day international conference organized by the Chamber of Mines of the Philippines.

Mining and metals market expert Julia Ralph said at the conference that the price recovery would be led by base metals, such as gold, silver, platinum, aluminum, copper, lead, nickel, tin and zinc.

Zinc and nickel will recover very strongly while lead and copper will have a mild improvement, she said.

The recovery in metals prices will happen despite what Ralph calls as “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,” she said.

“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, Ralph said, was “limited sustainable and cyclical cost savings” or simply put, managing project costs.

COMP president Benjamin Philip Romualdez said threats—such as the flexibility of certain competitors and managing project costs—were something the industry and the government could work together on if the country wanted to be a “prime mining investment” destination.

“The government must help current and prospective mining projects and investors manage costs and be flexible amidst competition by ensuring there is stability and consistency in mining policies and regulations, especially in the fiscal regime,” Romualdez said.

Romualdez said developing the country’s vast mineral resources required a “partnership between the government and 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 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,” Romualdez said.

He said one of these 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.”