Mining industry expects Toronto Stock Exchange to recover

The retraction of international credit markets and of some strategic stock markets such as Toronto’s, which characteristically finances mining projects, will impact on the level of exploration in Argentina reservoirs. This is stated by Julio Ríos Gómez, head of Gemera, the entity that gathers mining explorers in the country.

“In recent months investors are less willing to finance mining and seek other less volatile commodities, while the capital market still does not recover. So, the world scenario is not the best for the industry,” analyzed the manager in an interview with El Inversor Energético & Minero.

How would you describe the mining scenario at an international level?, we asked the manager.

At an international level, there was a series of swings in commodity prices, although gold remained at high levels, and copper finished with the same amount as the previous year. Even silver recovered its price, after recording a sharp drop. However, prices were quite volatile. There is also international growth of cost inflation, causing a drop in profitability. And the emerging economies have slowed the purchase of minerals, especially China.

Therefore, global mining numbers will not be as good as they are now. Our expectation is refocusing towards the second half of 2013, because we believe that there may be an improvement in the conditions of commodities and in the global economy. In turn, investors will become interested in different projects and look to Argentina again.

What is your balance of the last exploratory campaign?

Facing the international context, which is not the best, we also have to add some internal measures that did not contribute, such as the obligation to immediately settle foreign exchange from mineral exports. For all these reasons, although initially we expected a very good season, similar to the one we had in 2011, we find that this expectation was not fulfilled. Some of the advanced projects slightly slowed their investment, while others continued with what was already scheduled. But most pure exploration programs have slowed down, except in provinces like San Juan and Salta, which have maintained their investment. Santa Cruz, however, is facing a more noticeable drop.