Coal news and updates

‘Mining slowdown to persist longer than expected’

The prolonged slowdown in the global mining industry is caused by overestimation of demand and over-reliance on China, among others, and is likely to continue for more time than expected, said a senior analyst.

“The prolonged slowdown in the global mining industry is the cumulative outcome of the gross failure in apprehending future demand projections, over-reliance on China and competition amongst the mining giants to hold market share rather than focus on production discipline,” Gouranga Sen, Principal Analyst at Geovale Services, told ICMW.

He further said, “The pain of closure of mines, job cuts, bleeding financials, dearth of finance for sustaining operation is likely to continue for more time than expected.”

However, this downturn has yielded some positive outcome as well. “Severe cost-cutting and productivity improvement have reduced the operating cost in more sustainable mining projects. Continued investment in innovation, automation, rationalising labour force, utilisation of renewable energy etc will have long-lasting impact on flattening the cost curve,” he said.

The depression has also helped serious players pick up quality mining assets at dirt cheap price, he added.