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The key trends to watch in the Global Mining industry over the next one to three years primarily root into one or both of the big ticket items: Access to Resources and Cost Management.
Access to Resources – Low-Cost Reserves (Producers)
Over the past decade, exploration for many mineral commodities has not been extremely effective at substituting the annual production by new reserves. Although commodity prices have been high and metal production revenues have been robust, most companies have seen their overall reserve base shrinking or have seen the low-cost production being replaced by higher-cost reserves, whilst development timelines through the exploration and development cycle have lengthened and the associated costs from exploration to feasibility have been steadily rising. Companies are aware that in the years to come they will need to be even more rigorous in project development, from the first exploration stages or acquisition, through development to production, so as to have reserves that can be extracted at all-in low costs. A clear focus on operational efficiency and on effective risk management will serve a sustainable low-cost, reserve-based business.
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