The history of the global mining industry in every form is shaped by the economics and market opportunity of restricting underground mining.
The effect this has on:
1. The market, over decades, is that it increases the global costs along with associated prices and profits on all metals uniformly. Therefore, it is not noticeable unless you are aware of the evolution intention over a long time span.
2. The evolution of mining machinery, systems and procedures has been tightly restricted if you understand the motivations behind them. Mining Machinery Manufactures [MMMs] understand this market dynamic and shape their businesses around it. In doing so, the MMMs have tended to prevent step changes in the methods used for underground mining as an entire system. They do this because a restricted global underground mining industry produces 10 times as many surface mining machinery sales as what could be sold underground. The MMMs have a large incentive to restrict underground mining by numerous and brilliant methods. Methods I call Interference Anomalies in Global Mining, that can be fully understood in this publication.
3. The mining economy is a closed-circuit monopoly, which everyone has been completely unaware of until now. It increases metal prices by restricting underground mining, preventing the efficient development of all underground mining metal commodities. This dynamic has reached its full potential and is now a burden on the rest of the global economy, and even the companies that have created it.
Changes to the MMM's dynamic opens up unrestricted underground metal mining methods that allows global economic confidence to grow again, and within months.
Sandvik (SDVKF.PK), Atlas Copco (ATLKY.PK) and Caterpillar (CAT) [SACC] are the primary MMM's monopoly controllers. They will be asked to change their mining applications and intentions immediately to allow the supply of metal commodities to surge within 24 months.
Other MMMs will also be asked to adapt their mining intentions and products.
Sandvik and Atlas Copco's Mining divisions make up a large part of their profits. A period of uncertainty will fall over this part of their businesses, as their methods will have to adapt, as changes are demanded. A short-medium term drop in value is expected in waiting for both their mining responses.
Caterpillar Mining will also go through a period of uncertainty. However, because Caterpillar's mining business is a much smaller portion of its company's profits, the impact is estimated to be less or even negated by the increase in global economic confidence and how this may help their construction sales. Caterpillar may indeed become the primary driver of this global mining dynamic restructure. A short-term drop in value is expected while waiting for Caterpillar's response.
General Electric (GE) has the potential to become the leading player in the mining industry with GE Mining and its electrical abilities. Because GE also is a large manufacturer of metal based products, it will increase in value more than the other manufacturers.
Komatsu (KMTUF.PK) has also shown an interest in developing its own underground mining capacity. Komatsu is in the same boat as Caterpillar with large business profits coming from sources other than its mining business, but tightly connected to economic growth.
Joy Global (JOY) will largely be unaffected due to its focus on underground coal to which this mining intention does not largely apply to. However, an increase in coal prices due to increased economic activity may increase underground coal mining machinery sales.
All mining companies including, but not limited to: BHP (BHP), Rio Tinto (RIO), Glencore (GLCNF.PK), Xstrata (XSRAF.PK), Vale (VALE), Anglo American (AAUKF.PK) will have to assess their individual positions as these will be very different in each occasion relating to their asset diversities and financial positions.
Global manufacturing will regain the confidence to invest in expansion and innovation again, as the costs for most, if not all base metals and rare earths, will fall considerably over the next two years.
These outcomes represent a short and long view.
This does not describe a conspiracy theory, it is a normal business direction the mining industry has taken.
A simple global awareness of such a change in the intentions of underground mining rejuvenates global manufacturing investment confidence almost immediately.
This is a major economic event that will be driven by the market to remove negative global economic uncertainty and replace it with positive investment conditions through the primary, intermediary, tertiary and Government sectors.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.