Economic uncertainty and pressure on global currencies continue to impact the price of precious metals including gold. Emerson’s Juan Carlos Bravo, a member of the metals and mining industry team, explores the performance of gold mining stocks and the role automation can play in restoring investor confidence.
The price of gold price is on the rise again and ended up trading at $1,737.5 an ounce last Friday. But, as reported in the article “Gold Miners Get Chance to Regain Luster“, gold miners are having a tough time getting additional capital from investors.
The performance of mining-company shares has left much to be desired for the investment community and they are starting to ask tough questions. They are seeking answers for and epidemic cost overruns, labor shortages, and rising prices for everything from diesel fuel and explosives to drilling equipment, which impact overall profitability.Many of the mining companies did not meet their own production or profitability targets, which in turn are impacting stock price performance. As expressed in the article by Chris Mancini, an analyst with the Gamco Gold Fund, “…investors’ demands are pretty simple: focus on finding cost-effective gold deposits, and develop them on time and on budget. ‘If you can’t do that,’ he said, ‘just give us our cash back.'”
In my opinion, gold miners need to increase the level of automation technology used in their operations. With the right technology, they can minimize production downtime by establishing predictive maintenance practices and performing remote monitoring. These practices also help to compensate for the shortage of skilled workers. This technology helps to run the mining operations more efficiently, train less experienced personnel more quickly, and monitor costs in real time in order to see where problems impacting profitability are showing up. An earlier post, If it Moves—Monitor it!, highlights some of these technologies, which can reduce unplanned downtime.
Gold miners have shiny futures if they can use technology to help control the costs of operation and reestablish the trust of the investment community.