By Stuart Burns
Metal Miner
It’s curious, isn’t it?
Miners saw the fall in metals prices and most of them reacted promptly by cutting capex, in some cases production, and wherever possible, cash flow.
Cutting back on capital expenditure is not a short-term option. It can take years to reverse even a project slowdown, and to resurrect a mine project that has been closed can take five to 10 years. So if miners are battening down the hatches, they must be confident prices are not going to come back anytime soon, if you like that the super cycle is, at least for now, over.
If that is the case, it begs the question: why have producers not hedged their production at what could prove to have been historically high prices?