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The Decimation Of The Mining Industry

The shares of Goldcorp, the worlds most valuable mining company, have fallen by 75% since 2011 and are now worth a miserly $13.10 compared to $55, four and a half years ago. Yesterday alone they fell over 10% following publication of the company’s third quarter results.

The hopes of only a few weeks ago that gold would begin to lead the mining industry as a whole back on the road to recovery, have been dashed by the Feds recent announcement that it is leaving interest rates untouched, at least for now. Since the announcement, hedge funds have been bailing out of gold futures, big time, with the result that gold is only just holding its head above $1140 per oz. A break below that would indicate a reversal of the rising trend seen over the past few weeks.

Even potash which was seen as the answer to enabling the worlds ever burgeoning population to be fed, has not escaped the mayhem. Potash corporation, the worlds biggest fertiliser producer, has slashed its current  year forecasts and will sell less than expected due to a mixture of weak demand and weak prices.

Mining finance has virtually come to a stop with only 12 deals of over $12 m.announced in September,  to companies worth less than $500m.

The result of the devastation is that the worlds 2,684 listed mining companies are now worth less than the combined value of Apple and Google.

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