Microeconomic, mineral resource industry
This report is to discuss the main microeconomic environmental factors affecting the junior mineral resource industry. To avoid confusion the report will concentrate on the junior exploration mineral industry versus the mining industry. The mining industry is directly related to the junior mineral industry however is significantly different as the companies in the junior industry are exploration companies who are not in production and have no revenue stream.
There are three major stock exchanges in the world for the resource sector both in the junior exploration and major mining sectors. These exchanges in order from largest based on market capitalization are The Toronto Stock Exchange, The Australian and The London Stock Exchange (TMX Publication, 2010). All of the exchanges listed above have Tier 1 and 2 exchanges. The majority of the junior exploration companies are on the Tier 2 exchanges.
[...] The following factors where considered. Operating efficiency Concentration in a particular high-risk jurisdiction; and Product diversity The industry's competitive risk and growth is also based on: Effectiveness of barriers to entry; Level and trend of profit margins; Risk of secular change and substitution by products, services, and technologies; and Risk in growth trends When assessing a mining company's competitive advantage the following parameters are considered: The ability to increase production and reserves through internal development; Growth potential and strategy Various other factors such as ease of access to market, contract profile, and pricing power are relevant. [...]
[...] Discuss the main microeconomic environmental factors affecting the junior mineral resource industry This report is to discuss the main microeconomic environmental factors affecting the junior mineral resource industry. To avoid confusion the report will concentrate on the junior exploration mineral industry versus the mining industry. The mining industry is directly related to the junior mineral industry however is significantly different as the companies in the junior industry are exploration companies who are not in production and have no revenue stream. [...]
[...] There are several sub micro environmental factors can greatly effect the industry and companies. Companies need to adapt to the environment working with the communities and local governments. The majority of the metal mining companies consist of companies primarily specializing in exploration. If juniors find a deposit, it is usually sold to a major mining company, capable of raising the necessary capital and experience to invest in actual production. The industry is highly cyclical, primarily when evaluating product differentiation, barriers to entry and profit margins. [...]
[...] A good example of uncertainty-protected areas is with a public Canadian mineral exploration company named KWG Resources Inc. The company has been working in Northern Canada for over twenty years in uncertainty protected areas and has still yet to build a mine and or sell out to a major mining company. (kwg resources ref). KWG has spent over 10 million dollars on their Corporate Social Responsibility Programs in efforts to work with the aboriginal communities for mutual agreements, assistance, development, finance etc. [...]
[...] The strongest mining companies cannot differentiate their products to get better or more stable pricing. Bibliography "Key Credit Factors For The Metals And Mining Upstream Industry." No Records. N.p., n.d. Web. "Mining in the Americas." N.p., n.d. Web Apr "Market Structure for Metal Companies." Mining Solutions. N.p Dec Web Apr "KWG Resources Inc." KWG Resources Inc. N.p., n.d. Web Apr Kleinschmidt, Brigitte. "SAPPOV Differentiate in Commodity Markets: Mill Products Industries' Challenges and Opportunities." Recent Posts. N.p., n.d. [...]
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