Mitigation of Risks and Profitability of Mining and Metallurgical Projects
Authors: C. Twigge-Molecey and I. Gordon

Abstract

Over the last 10 years the fortunes of the mining and metallurgical community have changed substantially. Several key influences have put the industry under extreme pressure.

In summary these are:

• A profound lack of understanding by the public about the importance of metals and materials in
  supporting their increasing quality of life
• A clash between societies that see mining and metallurgy as key development instruments, allowing
  them to move out of poverty, and the developed world concerned about recycling and possible issues
  around trade, health and safety
• A perception that it is a sunset industry that does not offer stable careers. This results in difficulty
  attracting the best young people
• The poor financial performance over several business cycles resulting in it becoming increasingly
  difficult to raise capital. The sectors return on equity in the West has been around 5% globally for both
  2001 and 2002 and 4.7% average in real terms from 1973 – 2001 [1,2]
• The opening up of the Russian, Ukrainian and Chinese markets over the last 10 years totally changing
  the global metal market dynamics with significant impact on metal trade flows and prices
• Increasing competition from non-metallic materials