Daily Archives: August 19, 2014

The cycle of high mineral prices are over, analysts say … what will the ruling demagogues say now?!

Lidia Mamani reports for Pagina Siete:


The cycle of high mineral prices are over, analysts say

In the 80s, prices collapsed after years of crisis, since 2005, there was an increase and high peaks. In recent years there have been ups and downs.

The cycle of high prices of minerals, recorded from 2005 until 2012, came to an end; there is volatility, although these are expected to remain relatively stable in the coming years, experts agreed.

2014-08-17 09.21.14 pmSince the 80s, when tin prices collapsed and caused a severe economic crisis in the country, the main mineral exports managed to recover in 2005, with peaks in 2008 Since then, the trend has been high and low (see graphic).

“Political movements and banking crisis in the northern world do shake prices in the short term, because some companies reduce their operations or close. Meanwhile, countries that were successful went bankrupt by poor operations of these banks. This instability is reflected in demand and prices for metals,” said the president of the Comibol Hector Cordova.

Since 2002 gold rose to reach a peak in 2012 and now stabilized at $1,300 a troy ounce, price will remain.

For silver, the behavior is similar to that of gold metal, considered Córdova.

Tin from the 80s had a steady decline until 2004 subsequently showed very high levels and with a maximum contribution in 2011 of nearly $14 per fine pound. Since 2013, remains on average $10.

In the case of zinc, low prices between 1980 and 2005, after that year went to $1.39 per fine pound was observed. After this expectable situation went down again. This barrier was overcome again during the first half of this year.

The lead had increased sharply since 2004, and held in recent years at 0.95 cents per fine pound.

Cordova believes that over the short-term there will be volatility.

The analyst Carlos Sandi said the cycle of high mineral prices will not be repeated, because the economies of China and other Asian countries have slowed their growth.

The challenge for the country is to retake prospecting and look for minerals that are now required by electronics. In the case of Huanuni it is required said, an economic technical project that will restore profitability.

Eugenio Mendoza, the former vice-minister for Mineral Policy, said that the international prices of minerals will have ups and downs, will not change in the next five years. “We are now in an interim period that will continue, because countries like China, Korea, Japan and the United States still require minerals,” he said.

In order to offset the decline in the share price, the government plans to invest at least 5,000 million in industrialization projects intended for lead and silver in Karachipampa, Mutún and gold for jewelry.

To date, according to official data, the investment does not exceed $300 million and is primarily aimed at developing lithium.