The prices of iron ore and coking coal are dipping and mining organizations are feeling the effects, including a need to do more with the resources they have on hand.
According to Mining contributor Frik Els, the price of iron ore recently hit a 6-month low, diving below $130 a ton. Furthermore, coking coal prices plunged even lower, dropping below iron ore prices and breaking a long held industry rule that coal should remain more expensive than iron ore.
According to The Wall Street Journal, this trend will continue as the year wears on, with UBS AG forecasting price averages as low as $100 per ton in the U.S. during the second half of 2014.
Import prices of iron ore at the port city of Tianjin in China fell more than 1 percent on Jan. 14 to $129.50 a ton, representing a worldwide trend as the location has long been a benchmark of the industry. The Wall Street Journal reported that the Australian government, another prominent mining region, is expecting iron ore shipments to rise as prices fall. The country forecasted that its national earnings will total more than $138 billion through June, a 17 percent increase from last year.
"There will be a softening of commodity prices, but we see good prospects for Australian export volumes holding up for the foreseeable future," Wayne Calder, Bureau of Resources and Energy Economics executive director, told the Journal.
However, in order to fulfill these predictions, mining companies will have to boost production while keeping operating expenditures steady. By utilizing a condition monitoring system, these groups can oversee key pieces of machinery and also boost their equipment reliability. This technology can help businesses avoid high level expenditures related to machine repairs by providing opportunities for scheduled preventive maintenance.