HOUSTON The global metals
and mining sector likely will encounter a number of hurdles as
it moves forward, according to Peter Jessup, vice president of
supply chain management at London-based consultancy group AMEC
Challenges include resource
nationalization in certain countries, Jessup said at the
Journal of Commerces Breakbulk Americas
Conference in Houston, citing Indonesias export ban on
copper concentrate, nickel ore, tin and zinc set to go into
effect in 2014.
Inflation remains an issue in
the copper markets, especially as capital expenditures
increased some 28 percent in 2011 compared with operating
expenditure increases of 24 percent. "Were seeing a
slowdown in expansion of Chinas smelting and refining
capability," he said. "Were expecting to see a refined
copper surplus move to a balance by 2014."
Looking at iron ore, Jessup
noted that steel mills worldwide are continuing to reduce
production capacity, pointing to Chinas slowdown in
buying. "Steel prices could fall up to 30 percent more, with no
sign that consumption will rebound anytime soon," he said.
"There has also been major selling off of iron ore."
With demand seemingly dragging
its feet, some mining companies may choose to become more
cautious in procurement patterns, Jessup said.
"Many mining companies are
slowing down their capital spending in 2013. This past April,
only 58 percent of North American mining companies expected to
increase procurement over the coming 12 months," he said.
"Ultimately, capital expenditures will take place, but it is
heavily dependent on political situations and the global