MINING & METALS
The metal industry worldwide is predominantly limited to very few players. This is because of the nature of the industry being highly capital intensive and stringent regulations. Though, the earnings from this industry are huge; the long-term survival of these companies depends on heavy expenditures incurred towards production and exploration.
Taking into consideration that these metals are naturally available in limited quantities and through intense mining operations, the price of these metals such as gold, silver, lead, copper, and iron are very high. This is due to the demand, expected inflation, possible appreciation and high returns on these assets. Numerous commodities’ exchanges also trade in these metals thereby, affecting their prices.
To further add, the metal industry is not vertically integrated like other industries such as oil and gas. Usually, the companies that refine and mine it, rarely sell it to the end consumer. Therefore, the industry is divided into different types of companies:
- Exploration – These are companies that actually explore specific areas and prove the availability of metals in those areas. They require relatively lesser capital and have the right to drill to confirm the existence of metals in particular places. They identify mines.
- Production – These are proper mining companies that extract metals based on the surveys done by exploration companies. Their work requires primarily clearance of over-burden and extraction so as to extract and produce the particular metal. These companies also often wash the extracted metals so as to arrive at the final product.
Since metals are limited in quantities; governments across economies often award contracts for mining and production to few companies basis several qualifications limiting the scope of new entrants.
Despite the threats involved; metals currently, have a huge demand which is not only limited to the end consumer but also across numerous industries such as steel in construction and real estate, etc. It is for this reason that small players have entered the market into the space for cleaning, refining, washing and creating an end-product. Additionally, considering supply is low but demand is high, prices marked with inflation will always appreciate the earnings and investment in this sector. Therefore, numerous investors have entered into this space not only to trade on commodity exchanges but also to invest in players.
Trust Corner aims to please our clientele and therefore, we undergo thorough market surveys and research so as to allow our potential investors to make the right choice. We also act as brokers for deals made in various metals such as copper, steel, etc.