Mining economics and strategy / Экономика и стратегия горнодобывающей промышленности

The economics of the resources industry are unique. All mining is subject to uncertainties not applicable to other industries. Every mine is different. Industry economics are difficult to quantify and categorize. Information is very costly.
In major mining countries, there is now a real dichotomy.The products of the minerals industry are essential primary ingredients in almost everything used in an advanced society, yet their availability is often taken for granted. In the developed world, the value of mining is increasingly being called into question. The difficulty in making profits is compounded by political uncertainties and environmental restrictions on top of the uncertainties created by nature. Against this backdrop, however, actual production in many developed countries has increased. Despite declining prices, as well as profitability that frequently falls short of expectations, more capital continues to be injected into the industry. Many of the factors that lead to profits or losses escape recognition if conventional tools of analysis are used.
Low profitability may be the order of the day for many participants in the industry, but this is not universal. In some cases, the finding of a rich orebody, either by skillful exploration or by chance, has been the key to success. Yet there are many examples of rich orebodies not producing profitable mines and of mediocre orebodies turning into successful long-term enterprises. In some cases, the ability of a company to anticipate the market has resulted in profits above expectations. More commonly, an unexpected market downturn has resulted in losses despite efficiency elsewhere in the mining operation. Even in this environment, superficially similar mines have turned in vastly different profit performances. Management decision making and factors other than market pricing and orebody characteristics probably have a much greater influence on industry profitability than has been acknowledged up until now. <...>