Sunday, 29 September 2013

Gold mining: the fading away of an industry...

The protracted downtrend of precious metal prices may have run its course, there is however no clear indication of much higher gold and silver prices in the near or medium term future.  Gold is moving sideways, unable to uphold $1400 for more than a few days.  Producers are scrutinizing their mining sites and not without reason. Production at mines with high total production costs may need to be scaled back.  Any new mining development will need to factor in lower gold prices going forward and the internal rate of return will be substantially lower.  Especially on sites where investment costs have been spiralling out of control, tough decisions may have to be made.  It should be clear that, under these circumstances, the global gold mining output will continue its decline, possibly at an accelerated pace.  Gold mining: the fading away of an industry...