Support 100 years of independent journalism.

  1. Business
10 June 2013updated 22 Oct 2020 3:55pm

The mining industry is about to fall into a very deep hole

But there could be light at the end of the tunnel.

By Oliver Williams

The mining industry finds itself in a very deep hole after new data from China.

China’s May figures show a dawdling second quarter in the world’s second largest economy. The effect was imminent on the Indian Rupee and the Australian dollar, but the biggest blow was delivered at mining companies, which fell 0.7 per cent. Commodity prices crippled from Australia to South Africa and Standard & Poor’s GSCI gauge of 24 raw materials dropped 0.5 per cent.

This whirlwind of data has sent tremors through mining companies everywhere, from board room to base camp. But why should this matter here in Britain, where mining is something more nostalgic than material?

The irony is that as Britain has lost all its mines, it has gained more mining companies. London has become the commodity centre of the world through the London Metal Exchange and, as a result, has some of the world’s largest mining companies: Anglo American, Glencore Xstrata and Rio Tinto are all listed here.

Aside from China’s depressing figures, it has not been a good spring for London’s listed miners. ENRC, the London listed Kazakh mining group is under investigation by the Serious Fraud Office for multiple counts of corruption while Bumi, already a boardroom battle ground, announced last week that it has “lost” $201m. Following these allegations, there are calls for the FSA to keep a closer eye on these UK-listed mining companies – that means more regulation.

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. A handy, three-minute glance at the week ahead in companies, markets, regulation and investment, landing in your inbox every Monday morning. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A weekly dig into the New Statesman’s archive of over 100 years of stellar and influential journalism, sent each Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy

But perhaps it is not all doom and gloom for London miners. Like with the banking industry, forced competition on the one hand and tighter regulation on the other might see a turnaround in an industry mired in controversy.