The past year or so has been painful for the mining sector. Commodity prices have leveled off and capital is harder to come by. With investors focusing on returns rather than quantity, financial markets are punishing companies with big project pipelines and hefty spending programs—leading to project delays, big write downs and several high-profile CEO departures.
The downtrend is compounded by geological reality. For many commodities, much of the ‘easy ore’ has already been mined. Companies are building larger, more capital-intensive projects to mine lower grades in increasingly remote locations. This shift is changing the capital expenditure profile of many large mining projects, where infrastructure is now a larger investment than the pit or the plant itself.
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