Mining companies may have benefits from oil swell

Last Friday (13), the CEO of the company Franco-Nevada Corp., David Harquail, said he believes that lower energy prices can benefit mining companies: “Large energy consumers and to the extent that their costs are lower , it helps the margins,” Harquail said in an interview with Bloomberg.

“If you look at the typical open pit mine, only energy represents about 25% of the cost of moving and grinding rocks,” said the director. However, this benefit will depend on the type of metal used by the company. For gold miners, which already benefit from near-seven-year prices, the likelihood of a positive impact is higher. For base metal miners, the benefits are less evident.

However, this benefit is only caused because the fall in oil was due to oversupply. When the reduction is caused by the prospect of slowing economic growth, the benefits can be minimized by the impact they receive from the lower prices of their own products.


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