Mining & Trade News

Mining is a lucrative business such that many large, medium, small, junior companies and new investors are drawn towards mining all over the world. As a result, they may incur huge profits and expanding market share that are further reported in Stock Exchange markets. Some mining companies start very well but end up in misery because some elements of mining as a successful business were over/underestimated. A good and significant estimation calls for mining business opportunities that can be started in the nearest future.

Mining   Business   requires   concerted   efforts,   commitment,   passion   coupled   with continuous   detailed investigations to make informed decisions on whether to proceed with the business or not. One may end up spending billions of money/ dollars on a tenement only to discover that there is  nothing on the ground. Be careful here!!! The following are some crucial elements that can be considered before venturing into a successful mining business:  

1.Mining Business Commitment

Mining business being complex, calls for processes that must be taken including but not limited to Decision   Making,   Mineral   Discovery,   Mineral   Evaluation,   Acquisition,   Excavation/Mining, Processing,   Marketing,   Manufacturing,Mine   Closure and Rehabilitation.   This   is sometimes referred to as the Mining Value Chain and one is reminded to know exactly where he is along the chain and will make decisions on how far to go in future. The next step is to check out whether the investor has the vision, passion, perseverance, finance and time to pursue mining business seriously. Other investors are on trial and error basis and this risks the business. Mining is not for the faint hearted.

2. Decision on which mineral to Explore or Mine

The earths’ crust is rich in mineral resources and only but a few are extracted for industrial use. Depending on the vision, financial potential and present stage in the mining value chain, the investor  can choose  which  minerals/metals to  extract. It   is advisable   for the  investor or  the company to choose a mineral that has a good market demand presently and beyond but should not be exhaustive in the shortest time possible. The issue of evolving industries and the driving commodities must also carefully be considered here as well .    

3. Decision on Mining Business

As an investor or a company into mining, there is need to think if there is a possibility of being successful in Discovering,Evaluation,Acquisition,Excavation/Mining and Processing, Market or Manufacturing of a chosen mineral. The company/investor must be capable of meeting costs of the chosen stage and the potential risks associated at each stage of the process.    

4. Choice of the area to mine

Minerals are found across all over the continents. To start a mining business, a geographical location of an area is  important. The choice should be based on country specific mining legislations, flexibility/ease of doing business, logistics, human capital or manpower resources, infrastructure, Energy/power, security, supply chain and marketability of end products. Considerations should also be based on whether the mining business is within the country/ continent or overseas.

5. Choice (Greenfield or Brownfield)

Mining Business ventures can either be classified as Greenfield or Brownfield. Greenfield ventures are unexplored, as a result they are cheaper to acquire as they can hardly have any previous investments.   Brownfield   ventures  are already explored, mined where investment was previiusly done and  requires   thorough   due   diligence   to   ascertain   the   mineral potential   and   hence   expensive   and   time   consuming   but   can   smartly   and   quickly   generate revenues.  

6. Acquisition/Partnership/Joint  

Mining  businesses   may   be  purchased,   acquired   or   worked   through partnerships. It all depends on the choice of the investor whether to engage a partner or run it sole. It must be noted that acquisition is driven depending on the mining laws of a specific country while partnership may be based on equity or on profit sharing. The investor is encouraged to study all these options to come up with a viable decision.

7. Due Diligence

Any high value commodity should be studied, carefully assessed and looked at if it is going to generate income by bringing profits. This is the same with minerals in a mining business. Mineral prospects are mostly lying unexplored underground. Sometimes acquisitions tend to be overrated in terms of pricing and partnership terms are written beautifully to attract investors.. Therefore site visits and due diligence must be conducted to evaluate the mining business opportunities to get a reasonably fair idea as to what the investor is getting into. A highly competent team of consultants must be engaged to carry out the Due Diligence Process and also some research is required. In this way, investment could significantly be saved from future risks.  

8. Budgeting and Financing

To achieve a successful mining business it is better and important to seek advice from geology,mining, mineral evaluation experts before clicking the business. Preparations of budget plans, financial capability/stand and development of a budget are of utmost significance to take care of expenses on   site   visits,   consultanting   fee,   data   analyses   and   document   purchase,   exploration,  and  mining.

All in all what the investor/company needs to do is to start and take steps to turn the mining business 

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