Judging from some of the comments at this week's Mines and Money (M&M) conference in London, the mining industry needs a miracle it the bull market in metals prices since January 2016 is going to maintain momentum into 2019. Fortunately, next Tuesday, December 4, is the feast day of Saint Barbara, the patron saint of artillerymen, military engineers and miners.
Saint Barbara was an early Christian martyr, with accounts placing her in third-century Nicomedia (in present-day Turkey) or in Heliopolis (present-day Lebanon). There is no reference to her, however, in early Christian writings and, because of doubts about the authenticity of her legend, she was removed from the general Roman calendar in the 1969 revision, though not from the Catholic Church's list of saints.
According to legend, Barbara was the beautiful daughter of a rich pagan named Dioscorus, who kept her locked in a tower to preserve her from the outside world. Having secretly become a Christian, she escaped. The legends diverge at this point, although the most persuasive, at least for mining engineers, is that she hid in a silver mine. Unfortunately, when she emerged, Barbara was beheaded by her father.
Dioscorus was promptly stuck dead by lightening, and this association has caused Saint Barbara to be invoked against fire and explosions. Less obviously, she is also the patron saint of mathematics and the Italian navy.
Concern over the strength of the near three-year bull market in the price of most metals was supported by data from the metals and mining database of S&P Global Market Intelligence, which shows a clear decline in metals prices in the past few months. Indeed, the third quarter was a considerable disappointment, with the industry's collective market capitalisation falling back below US$1.4 trillion by the end of September.
Although the general mood of the M&M conference was bullish, and networking seemed as lively as usual, there were several presentations that cast doubts on the recent recovery. For example, the head of metals research in Europe for Bank of America Merrill Lynch, Michael Widmer, told a panel at the conference that the current bull market for metals might not be sustainable. Mr Widmer commented that the uncertain economies in the US, Europe and China might result in lower base-metals prices, even though he expected the US currency to weaken.
Several speakers also doubted that the electric-vehicle revolution was yet ready to rescue the mining sector. For example, the head of commodity markets strategy at Bank of China International, Xiao Fu, said that her organisation was "excited" about EV metals but that this was not going to impact markets significantly for at least five years.
There might be more than a few people in the mining industry praying to Saint Barbara on Tuesday.