Climate change has always been present but we haven’t given it much attention. Extreme temperatures, drought, heavy rains, earthquakes and volcanic eruptions, these are what we are currently facing. Not just the mining industry will be affected but also our own personal lives.
A lot has happened since the COVID-19 pandemic, there were issues related to geopolitics, political instability, nationalization, and even global trade wars. With an attempt to revive the economy because of the depression that we have experienced, more and more countries will start urbanization and further develop buildings and infrastructures. Demands will rise and supply chains will ned to keep up with this increase. The mining industry will once again find itself in the spotlight with the challenge to quickly deliver these demands.
According to KPMG these are the top risks for the mining industry in 2022, Environmental risks, commodity price risk, community relations and social license to operate, political instability/nationalization, global trade conflict, ability to access and replace reserves, permitting risk, supply chain risks, talent crisis and regulatory and compliance changes/burden. But the mining industry came prepared, different mining leaders have already thought of different ways to cope with the risks that we have like using eco-friendly generators and etc.
About 12 new metallic mines will begin their commercial operations this year. They will mostly produce nickels with the hope to help the outlook of the mining industry. The Philippines produced over 386,359 tonnes of nickel last year, 17% higher than the last year. Philippines has been China’s biggest nickel ore supplier. Even with the current problems that we are facing like the rising fuel prices, inflation and manpower shortage, these mining leaders are still hopeful that by opening new mines we’ll be able to solve one problem at a time.
Mining in the US
Last 2008, the Mining Safety and Health Administration have recorded over 392,719 US mining workers and this has definitely declined through time since a lot of miners have already retired.
However, the mining industry is still a major employer in the US and it has also been helping the US economy. The mining industry has generally declined over the past 30 years, mostly because of technology like lamps that are fueled with coal were replaced with light bulbs powered by electricity and etc. Hiring workforce is a challenge specially because there are challenging physical environments and some are even in remote locations.
Salary is relatively high but it is still lower compared to the gas and oil industry. The annual salary for a mining or geological engineer in 2011 is $84,110.
Prices of Metals
Raw materials’ prices were pretty high earlier this year. For example, copper had a all-time high last March with the price of $10,600. After two months, these prices fell back down because of the conflict between Russia and Ukraine. As of today, copper is priced at around $7,600 per tonne. Iron ore prices, on the other hand, has been a little more stable compared to other metals. China is the largest consumer for iron ore since they have been developing their country to recover from the pandemic.
Energy and labour are one of the major concerns in this industry. Mostly because they wouldn’t be able to function and produce metals without these two. The cost of chemicals and explosives used for extracting minerals is also a major concern that we have to address in no time.
The prices of fuel and metals has doubled since Ukraine and Russia declared war. Russia is a great contributor to the oil industry. With that being said, this ware made fuel prices more resilient to fears of demand.
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With an attempt to control the amount of minerals being extracted and preserve non-renewable resources. The government placed an open-pit mining ban for four years in the Philippines last December 2021. According to experts this ban will stop the development of a $5.9 billion copper and gold mine.
In May 16, the government has decided to lift the ban to give way to the landmark environmental code of South Cotabato. This has been a very controversial topic for the people of South Cotabato.
On the other hand, the Tampakan mine is the largest undeveloped copper-gold minefield in Southeast Asia. It has an expected 17-year life and it is expected to yield an average of 375,000 metric tons of copper and 360,000 ounces gold.
This mine has vowed for a “responsible mining”. A lot of indigenous communities have been trying to shut this mine down since they are worried about the effects that this may bring to our environment. With promises of financial and social benefits, these communities have finally showed their support for the project. According to the oppositions, these mines may cause drought in Mindanao since these mining projects will put local water supply in great danger.
Long-Term Outlook for the Mining industry
Even if gold is just a small part of the mining sector, gold prices get the most attention. Since the pandemic has started, the price of gold increased for at least 25% but this price increase may not last. Gold prices is expected to drop again by 2030. On the other hand, prices for other metals has generally recovered from the pandemic and it has been steady ever since.
There have been rumors that Us has planned a major infrastructure program that is enough to support the prices of some metals like aluminum, copper, and iron ore. Lately, the world has been converting to clean energy which will lessen the impacts of climate change.
According to the World Bank, there will definitely be a price growth for industrial metals such as aluminum, copper, lead, nickel, tin, and zinc by 2030. Precious metals prices, on the other hand, will decline since the main focus of the world is the industrial sector. Precious metals are still seen to be used to make medical and laboratory instruments.