Minerals analyst
Beyond Science, Engineering and Technology – the Role of a mining analyst.
Since the late 1970s, mining analysts have provided an important bridge between listed companies (on stock exchanges) and institutional investors (banks, retirement funds, etc.). The value of investment analysts lies in their ability to provide investors with accurate and reliable information. By doing so, they help investors make informed decisions about their investments, which can ultimately lead to better returns and enable people to retire comfortably. In addition, they help to promote transparency and accountability within the mining industry, which is essential for its long-term sustainability.
A key role is to provide detailed reports on the performance of mining companies, quantify the risks and the rewards, monitor commodity trends and prices, and provide Life of Mine valuations. The role also requires keeping abreast of political, regulatory and tax changes that may impact the mining industry. An ideal background to becoming a mining analyst would be a degree in either geology, mining or metallurgy backed up by a Chartered Financial Analyst (CFA) qualification. A sound knowledge of economics is also useful. But most of all, time spent working in the industry is a must.
As a primary industry, mining played a vital role in developing South Africa and via the multiplier effect (one mining job directly or indirectly creates several other types of jobs) has impacted every business sector in the economy. The mining linkages that run through the economy offer mining analysts a wide range of work and business opportunities, be it advisory or developing a business that services the greater mining industry:
- Geology, mining, and metallurgical processing,
- A wide range of equipment and technologies procured by mines,
- Off-mine services such as medical/health, power, road, rail and port, and the environment,
- Financial services – stock market, mergers and acquisitions, fund-raising, auditing, tax, insurance, medical aids, banking, and
- Advising governments on mineral rights and mining policies.
The stock market is a key indicator of the economic strength of any country. The chart below shows the tragic loss of listings on the Johannesburg Stock Exchange (JSE). People with engineering and technical skills need to stand up and be counted. For too long, accountants and lawyers have dominated the business world. If the climate change and environmental, societal and governance issues (ESG) forecasts are half right, mining has a bright future. Skilled analysts can play an important role in linking those with projects to those with funds.
See the links to Elements. Visual capitalist – Commodities versus Equity valuations and McKinsey: The mine-to-market value chain: A hidden gem.
Charted: Commodities vs Equity Valuations (1970–2023) (visualcapitalist.com) https://elements.visualcapitalist.com/charted-commodities-vs-equity-valuations-1970-2023/
The mining value chain: A hidden gem | McKinsey https://www.mckinsey.com/industries/metals-and-mining/our-insights/the-mine-to-market-value-chain-a-hidden-gem#/
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