FORMER Oxiana chief executive Owen Hegarty says a mining resurgence is on the cards as the fundamentals of demand and supply come back into play, enhanced by rising cost pressures.
Owen Hegarty
It’s getting tougher to be in the mining industry – unless you are Rio Tinto or BHP Billiton – with words like “boom” and “super-cycle” being replaced by terms such as “cost pressures” and “falling commodity prices”.
But, according to former Oxiana boss and now OZ Minerals director Owen Hegarty, the current market slump is just a “blip” and the fundamentals of demand will re-assert themselves.
Speaking at the Paydirt 2008 Victorian resources conference in Melbourne, Hegarty said rising costs and declining discoveries were going to keep supply from increasing and force prices higher again in commodities like copper.
Hegarty also said the China story had not disappeared and the nation continued to build infrastructure and consume resources at unprecedented levels, which would also continue to drive demand for resources.
“There is a snatch-and-grab going on out there globally for resources to supply burgeoning demand and we should be getting our engines ready for a market resurgence in the very near future,” Hegarty said.
Hegarty was the founding chief executive of Oxiana and managing director since September 1994. He stepped down from both roles to allow Andrew Michelmore, head of Zinifex, to take over as chief executive after Oxiana and Zinifex merged earlier this year.
Since the merger, OZ has been pounded by the market with its shares falling from Oxiana’s all-time high of $4.32 in November 2007 to its current price of $1.81, with the steepest decline from May this year – when its shares hit a 2008 peak of $3.97 – to earlier this month, when they slumped to a low of $1.63.
OZL Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
