have spent much of the past decade in investors’ bad books. Throughout the 2000s and early 2010s the industry, betting that the surge in commodity prices brought on by China’s economic rise would persist, splurged on investments and racked up hefty debts in the process.
The scope of what miners are expected to do to minimise the environmental impact of sites has also widened considerably, says James Whiteside of Wood Mackenzie, a research firm. Companies can no longer simply rely on diesel generators to power sites. They are increasingly being told either to connect to the grid or to install renewable-energy sources such as solar panels. Governments worried about water use have compelled miners to build desalination plants. All that has further increased costs.
Another reason for miners’ lack of investment is woefully lengthy permitting processes, which delay projects and add uncertainty. In America obtaining permits often takes between seven and ten years, with companies required to consult a variety of government agencies and other interested parties. In some countries environmental concerns have led to approvals being withdrawn. The Serbian government revoked the licence of Rio Tinto, another mining behemoth, for a $2.
Few bosses want to tempt a similar fate; others are also put off by spending in far-flung jurisdictions where governance is poor, for fear of irking sustainability-minded investors.As Western miners have retreated, others have piled in. Cash-rich Gulf entities are taking an interest. International Resource Holdings, an Emirati mining firm, is buying a 51% stake in Mopani, a Zambian copper miner, for $1.1bn. The government of the United Arab Emirates has agreed to invest $1.