sexta-feira, abril 27, 2012

Metals boom reflected in financial crisis

Metals experts gathered in Lisbon this week for the annual meetings of the  International Study Groups  on nickel, lead, zinc and copper.   The Goverment representatives from a large number of countries also participated in a joint seminar on  "How Society Benefits from Mining and Metals Production".

These International Study Groups are autonomous, intergovernmental organizations established two decades ago and located in Lisbon, Portugal. Membership comprises of metal producing, using and trading countries.

Their main objectives are to collect and publish improved statistics on the relevant commodity markets (including production, usage or consumption, trade, stocks, prices and other statistics such as recycling) , with the aim of improving market transparency.  They also publish other information, such as data on industry facilities and environmental regulations. 

Metal commodity prices have been on a sharply rising trend, which some analysts call a "super-cycle" driven by the quantum jump in demand from rapidly industrializing countries, the so-called "China Pull".  

This phenomenon is then reflected in the "China Push", which contributes to the balance of payments crises felt in net importing countries, big (USA) and small (Portugal).  

Mining projects are notoriously complex, and with long gestation periods (planning, financing and construction phases), so supply tends to be somewhat inelastic, contributing to price volatility. With the credit contraction, mining promoters lost access to traditional project debt,  but hight prices made it possible to increase the equity component well above the usual 40-50%.  Other financing packages include  commodity loans with repayment-in-kind (ex. gold loans), including o "Angola model".

See presentation by Mariana Abrantes de Sousa  in
See the press release
For copper, see,
For nickel, see,
For lead and zinc, see,