However, since 2008, the ratio of gold to commodities has surged, slashing the real cost of mining gold by over 60%.
FORBES: Gold Mining Stocks Are An Increasingly Attractive Opportunity
Better yet, the real cost of mining gold is headed lower.
FORBES: Gold Mining Stocks Are An Increasingly Attractive Opportunity
Investors seem to be concerned about what the increasing cost of mining will mean when coupled with a weaker gold price narrowing margins and more pressure on cash flows at gold mines.
FORBES: Gold Mining Stocks Still In Free Fall As Gold Price Stabilizes
Using the Goldman Sachs Commodities Index as a proxy for the costs of mining (because it is heavily weighted towards industrial commodities), the real cost of mining gold jumped by nearly 50% during this period, explaining why gold stocks did not provide the leverage that gold investors expected.
FORBES: Gold Mining Stocks Are An Increasingly Attractive Opportunity
It talks of more cost-cutting, but not if it threatens long-term deep mining of rich ores.
However, some scientists struggle to see how cost-effective asteroid mining could be, even with the high value of gold and platinum.
South Africa's mining sector has been hit by a series of wildcat strikes, which have cost millions of dollars.
BBC: South Africa strikes: Sacked platinum miners reinstated
How much it will cost Fortescue to produce a tonne of ore is the source of much debate in Australia's mining community.
ECONOMIST: Fortunes in the mining business come and go faster than ever
This new security situation, the ongoing reduction in tariffs and the relative low cost of labor force will be translated into an increase in foreign investment in sectors such as gold and coal mining, oil exploration and manufacturing, to name a few.
The project, called the Clinton Giustra Sustainable Growth Initiative, will focus on Latin America and other parts of the developing world and will work with the private sector--specifically, a group of mining companies--to address social, economic and environmental issues in a sustainable and cost-effective way.
Determining the actual marginal cost of production is somewhat tricky since the commodity is priced globally in dollars, but the bottom lines for South African mining companies are ultimately determined by the price they receive in South African rand, with their expenses also paid in rand.
FORBES: Analysts: Too Soon For Platinum Tumble To Hurt Output, But 'Something...To Keep An Eye On'
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