What You Need to Know About Mining on August 19th, 2016

For analysts, the sentiment towards the mining sector is mixed.

There is a lot going on in both ways.

The bullish gold market is something great for mining companies, which are now seeing notable profit margins in their operations for the first time in years.

Beyond the mining companies investment in gold, and industrial increasing demand in China, there are other fresh news that you need to know in the mining matter, specifically in terms of base metals.

Colombian Duty

After several years of mining operations in multiple Colombian locations by Minas Paz de Oro, the Supreme Court decided to give the company an ultimatum. According to the latest reports, the government will not accept further operations without the implementation of the proper environmental policies.

The Supreme Court considered that a great damage was being made in the mining locations. But what is more interesting is that the central government renewed Minas Paz de Oro’s license during 2010 to exploit the region until 2039.

This change of mind may come from heavy pressure created by environmental organisations and civil movements. Supreme Court’s stand, according to the media, is hard-faced and demanding.

“All individuals, especially those who carry out activities susceptible of damaging the environment, must comply with their duty of protecting and preserving the ecosystem, implementing the requiring measures to avoid damaging the environment, or to decrease or to mitigate the resulting consequences,” was stated in the ruling.

Another demand set by the Supreme Court was that all families living in the exploited regions have to be protected by the mining organisations, no conditions allowed. “All Colombians living on the territory have a right to enjoy a healthy environment and the correlative duty to maintain its preservation,” told the court regarding this matter.

Punishment Example

More to the east, Brazil is giving an example of justice. The Guyana Geology and Mines Commission, also known as GGMC, fined a Brazilian businessman who was conducting a mining operation in the Kaieteur National Park.

Along with the Ministry of Natural Resources, the GGMC raided the operation, finding equipment owned by Ceso Alves de Alcantara, the businessman in question.

The commission fined the man for US$7 million. De Alcantara did not deny the crime. He was performing a mining operation without a proper license and within a protected area. At the same time, he expressed his worries about the legal and financial matters.

A Good Reference

In the world of finance and investment, Woody’s Investors Service have a lot of weight. Recently, they reported their good expectations regarding the mining market. According to this organisation, stocks and commodities in this sector will enjoy a massive growth during the upcoming months.

The estimated period of growth will be between 12 and 18 months. Their analysts think that base metals will go from negative ground to positive numbers quickly. China’s situation is a key factor for this optimistic forecast.

Bulgaria’s Growth

Another good news for the mining sector is that the Bulgarian Chamber of Mining and Geology reported an important growth in mining output. According to the published data, the rise for 2015 was 15 percent.

This number is a record for the previous 10 years of mining activities. The output reached was 112.5 million tons. While this doesn’t mean a higher profit, because of the low metal prices during 2015, it means that Bulgarian operations are getting more effective and productive.

The Bottom Line

South America is giving harsh lessons to mining companies that aren’t respecting the proper environmental laws. This is a great deal for big names that are involved in discrete operations where they are forbidden.

On the other hand, the whole sector is glancing a serious opportunity to grow. Companies have to earn the traders’ trust because years of losing operations are hard to forget.