1. The long-term futureand scenariosJuniormining entities is more vulnerable and sensitive to changes in macroenvironment. After analysing the current state of MinCo and characteristics ofpossible strategy, it’s necessary to consider the external environment in the long-termfuture of 10 years.1.1 PESTELanalysisØ Politicaland legal.
Government is an important factor affecting mining industry. Withgrowing emphasize on a greener environment, government may limit miningactivities. Permitting requirements, license negotiations and regulations can alsobe complex and unstable, causing delays and rising costs in development.Furthermore, governments can review licensing agreements and ask for changes totheir benefits (Daniels, 2014). Besides, the negotiations of Brexit will bringhigh uncertainty in national policies. Lastly, mining projects are more exposedto terrorist groups given the remote operation locations. Ø Economic.
Metal and mineral prices are turning bright but some metal prices are lessfriendly (Passport, 2017). The demand for development of emerging countries ishard to imagine. China’s growth moderation (Song, 2016) is happening whileother Asian economies show great growth potential. There is also uncertaintyaround the US economy ([email protected], 2017). Fluctuations in global energyprices influence the running costs and profitability of mining businesses.Ø Social.An aging workforce leaves challenges to mining sectors.
Rising awareness ofenvironment protection bring more cautious consideration on mining projects. Similarly,the reaction of local communities is worth attention. Furthermore, the rapidgrowth of Chinese middle class will bring various demand for commodities.Ø Technological.With the end of silicon’s dominance in the electronics industry (Reuters Staff,2017), new materials will be in demand to further reducing the size of computerchips and other electronic devices.
The creation of new mining techniquesrequires more advanced technologies which can bring additional uncertainties.Green technologies also demand metals to produce renewable energy facilities.Furthermore, the rapidly widespread electric vehicles will require new metals,such as those for battery production.
Ø Environmental.Natural disasters such as earthquakes and floods have significant impact onmining projects (Marsh, 2013), given that mining activities tend to operate inremote areas. Water shortage is another issue that will place challenges oncosts.
Climate change continues to shape the mining industry.Ø Legal.Changes in laws have great impact on business environment of mining, such aslabor laws, environmental laws, safety standards, etc.Basedon issues above, the author selected 12 most relevant ones in terms ofimportance and uncertainty in each part.