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Old 12-04-2013, 07:56 AM   #1
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Red face Deloitte analysis of the mining sector

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However, as mining companies cut costs, they are uncovering hidden costs, the report suggests. “Mining lower-grade deposits give rise to a host of hidden costs,” said Deloitte. “With 75% of new base metals discoveries hidden at depths in excess of 300 meters, this practice is pushing up strip ratios—reducing the economic sustainability of mining lower grades.”
Pretty sure that lower commodity prices are reducing the economic sustainability of mining lower grades - as mentioned (and discussed) here.

Quote :
Meanwhile, the continuing commodity price decline “is causing widespread industry performance dips,” said the report. “Marginal mines are struggling to remain viable, stock prices are taking a beating and industry impairment charges are escalating dramatically.”

“The resulting pullback in exploration budgets only threatens to widen the gulf between demand and supply and could ultimately tip the industry back into another heated production cycle, causing costs to careen even further out of control,” Deloitte warned.

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Old 12-04-2013, 10:06 AM   #2
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Just as expected.
All things being equal, the simplest answer is quite often the correct answer - Occam
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