No matter what E&MJreaders are digging out of the ground and processing in the plant, odds are the market value for that mineral has declined in the last year. In some cases, such as precious metals, prices fell dramatically during the last quarter and the industry is just now coming to grips with the “new normal.” Similarly, readers who work for publicly-traded mining companies have seen the value of their company’s stock drop, exploration programs and ambitious projects tabled, and layoffs at marginal mines.

E&MJopens this month with a PricewaterhouseCooper report detailing the profitability of the top 40 mining companies. Spoiler alert: The news is not good and it looks like it might get worse before it gets better. The report says investors have lost confidence in the mining business and its ability to control costs. They are also unsure of the new leadership and its ability to deliver returns on investment. They are also concerned about topics beyond the control of most mining engineers and metallurgists, such as resource nationalism and metal prices. The report offers an interesting assessment of our business from the outside looking in.

Similarly, readers should not overlook South African Gold Enters Survival Mode, written by Gavin du Venage, E&MJ’s reporter in Johannesburg, which details the situation on the Rand. At a time when other gold producers were investing in equipment and technology, they opted for “cheap labor,” which as it turns out isn’t really that cheap. Oscar Martinez, E&MJ’s Latin American editor, based in Antofagasta, Chile, filed a report on copper this month, All Ships Headed to China (See p. 68). While copper prices have softened (along with the other non-ferrous base metals) recently, they have a long-term, ace-in-the-hole: urbanization in China and India. The problem is that copper producers have to cost effectively mine and process more ore because of declining grades.

The industry has witnessed firsthand how huge profit margins lead people to make questionable decisions. Time will tell if that decision to invest in iron ore in Brazil or sell the Canadian diamond mines was foolish or brilliant. Those deals and many others are being evaluated in today’s dollars by impatient investors. A disciplined approach to projects based on reasonable metal prices that holds costs as low as possible is an equation that works during good times and bad. The approach and costs are parameters that can be controlled; reasonable is the free-floating variable. This is the time for engineers and project managers to shine. Make the best of your summer of discontent and enjoy this edition of E&MJ.

Steve Fiscor, Editor-in-Chief, E&MJ