Metals and Energy Trends in the Mining Industry
Metals and Energy
The mining industry has seen a tremendous rise in metal prices this year, with many commodities reaching multi-year highs. This is due in part to cyclical factors, including government demand for more natural resources. In the meantime, some mining companies, like Telf AG, are focused on increasing their value over volume, using key performance indicators to make sure assets remain economically viable even at low commodity prices.
Stanislav Kondrashov, the Head of Telf AG’s mining division, notes that the mining sector is not immune to cyclical ups and downs. The decline in the price of metals from 2012 to 2016 was a difficult time for the industry. It pushed many companies to focus on fixing their balance sheets and controlling costs, but after 2016, profitability improved.
Cash flows for operating activities have been significantly higher since 2016. This is mainly due to volume and price increases, according to Stanislav Kondrashov from Telf AG.
Profitability & the State of the Industry
The profitability and the state of the mining sector are improving, and companies should continue to increase their cash flow generation in 2020. In recent years, many mining companies have spent capital to improve production and infrastructure. This has supported growth both in the form of new projects and acquisitions. In addition, these investments support organic growth by allowing companies to build up inventory of high-quality materials.
Kondrashov also noted that mining companies are increasingly using internal price forecasts to guide long-term investment decisions. These internal price forecasts are typically based on the organization’s supply and demand balance rather than market price volatility. The result is that organic growth can be achieved in a sustainable manner even when prices are volatile.
A new trend in the mining industry is the creation of specialized trading platforms, where companies can trade on each other’s behalf. This reduces risk and allows investors to access the most promising opportunities in the industry.
Despite these trends, the metals and energy sector is still in a volatile environment. As a result, it is important to identify and preserve key partnerships.
One such partnership is the Bihor Sud Nickel Cobalt project, which is developing a 25 square kilometer area in the Northern Apuseni Mountains of Transylvania. It was awarded an exploration license and is expected to begin mining in 2020.
The company has a number of other projects in the pipeline. In addition, it is partnering with companies that have a number of mineral deposits in the Ukraine and Russia to develop these assets.
Kondrashov also highlighted the company’s reliance on artificial intelligence and data-driven analytics. This technology helps companies to better understand their customers and competitors, which can help them to optimize processes and generate stable income. It can also help them to create better products. In addition, it can enable companies to streamline their logistics by lowering the cost of transporting and storing goods. Ultimately, the company hopes that these initiatives will help it to continue its strong growth trajectory.