Las Vegas, Nev. – World mining leaders today voiced strong optimism that durable demand for coal, minerals and metals will accompany the resumption in global economic growth, giving new life to the commodity market.
Speaking at MINExpo INTERNATIONAL® 2012, at the Las Vegas Convention Center, mining executives from four of the world’s leading producers of mining equipment, coal and minerals agreed that underlying global demand, powered by accelerating urbanization and energy consumption in the developing world, will benefit an industry that starts the global supply chain. More minerals, metals and coal will be needed to supply China, India and the African continent, regions dominated by massive urbanization and a rapidly growing middle class, they said.
The industry will be increasingly challenged by lower quality ore bodies, a shortage of mining engineers and an uncertain global financial system. But long-term fundamentals favor a bullish outlook, said four senior executives that spoke at the record-breaking mining exhibition hosted by the National Mining Association, the U.S. industry’s trade group in Washington, D.C.
Red Conger, president of Freeport-McMoRan Americas, a global leader in copper production, said the current market is in balance. “Even if copper grows only modestly – at 2 percent annually – supply will be challenged,” said Conger.
Gregory Boyce, chairman and CEO of Peabody Energy, documented the strong growth in global coal demand, powered by rapidly expanding Asian economies. “Energy is a basic human right, yet today 3.6 billion people in the world have either little or no access to electricity,” said Boyce. Coal will be critically important for providing this vast region of the world with affordable electricity, he said.
Richard O’Brien, chief executive officer of Newmont Mining Corporation, a major gold producer, observed the strong intervention of sovereign banks in the global gold market, with government purchases of gold up by 500 percent in the past decade. At the same time, supplying new gold to the market will be constrained by more difficult mining conditions. Today, gold is found not in large veins but “in grams per ton,” explained O’Brien.
MINExpo® 2012 Chairman Michael Sutherlin, president and CEO of Joy Global Inc., a major mining equipment manufacturer, said developing countries in Asia are only mid-way in their growth curve as measured by metal intensity per capita. Viewed from the perspective of parity with the developed world, said Sutherlin, “China is today where Japan was in the 1950s.” Because mining operations are now moving into more challenging environments that make mining more costly, Joy Global’s emphasis is increasingly on manufacturing machines that increase mining productivity, efficiency and safety.
The CEOS put to rest a prevalent myth: that global competition for natural resources may come at the expense of the environment and safety. On the contrary, they said, mining operations anywhere in the world that are the safest and most environmentally sound are also the most productive mines with the most talented workforce. “If we don’t get the environment and safety right, we will lose our social license to operate,” said Newmont’s O’Brien.
NMA President and CEO Hal Quinn welcomed the audience of more than 1200 to the CEO panel moderated by Dr. Jeffrey Garten, the Juan Trippe Professor in the Practice of International Trade, Finance and Business at the Yale School of Management.
MINExpo® 2012, sponsored every four years by the National Mining Association (NMA) in Washington, D.C., is the world’s largest exhibition of mining equipment, products and services. The 2012 show surpassed all previous mining exhibitions, with 860,000 square feet of exhibition space and more than 52,000 attendees from 36 countries. Global mining equipment and after-market sales are valued at $52 billion.
NMA is the American trade association representing coal, mineral and metal mines, mining equipment manufacturers and service providers.
For video of the Opening Session and information on MINExpo 2012, visit our website at www.minexpo.com.