Beyond China – why some commodities are profitable (MiningNewsPremium.net)
- By: John P Sykes
Posted in: Commodities, Mineral Economics, Mining, Publications, Recommended
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Yesterday, a co-authored article I did with Allan Trench for his Strictly Boardroom column was published on MiningNewsPremium.net, entitled “Beyond China – why some commodities are profitable (and others not)”. The article is available to subscribers of MiningNewsPremium.net.
The article is a reminder to industry strategists and mineral economists that there are more ways to profit in the mining industry than high commodity prices and strong industrial demand from China. The article reviews the various economic factors in a commodity market that control the creation of economic rent (aka profits): inelastic, derived or growing demand; diversity of end use segments and geographies; lack of recycling, substitution, or thrifting opportunities for consumers; high barriers to entry for new suppliers; a steep cost curve; main product mine dominated supply; oligopolistic supply, and the varying power of both buyers and suppliers.