A swath of first quarter exploration and production results released in May for industrial mineral companies revealed that both demand and prices are broadly stable across refractory materials, while consumption is rising for minerals used in pigments, fertilisers and drilling fluids. Excess capacity in some markets, including rutile and refractory grade graphite, is keeping prices down at low levels, although steady demand trends mean that values for these minerals are unlikely to fall significantly this year. From a broader financial perspective, the end of the mining industry’s long austerity chapter could finally be in view, with a number of mines signalling plans to increase spending on R&D, having adjusted to weaker pricing environments. Rio Tinto, the world’s second largest miner, intimated in its AGM in May that it may be in a position to pursue growth initiatives in place of capex restraint by 2015, after more than two years of aggressive cost-cutting. CEO, Sam Walsh, said that forthcoming investment decisions will not be based on current mineral prices, but on “the bigger, longer picture," which Walsh expects to improve as net mineral consumption increases and a strengthening global economy frees up more funding for mining projects.
