Falling Input Costs Will Benefit Gold Miners in Particular

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"Now gold companies are confidently projecting wider margins—which means more cash flow—and also an easier road to getting ounces out of the ground."

Mining costs, which were the industry's biggest headache up until a year ago, are now a bright spot for a sector more concerned with volatile demand and tight financing markets, top executives told the Reuters Global Mining and Steel Summit this week.

With prices for energy, reagents, and steel retreating and the strong U.S. dollar bringing down operating costs in other countries, gold miners in particular are set to benefit as the price of the metal has stayed strong, top executives told the Reuters Global Mining and Steel Summit in New York this week.

The shift in costs follows several years of rampant inflation in the mining sector, which had kept gold miners from realizing the benefits of soaring gold prices.

The reductions have been the silver lining of a worldwide economic slowdown, as weaker demand has lowered energy costs, sapped demand for reagents such as sulfuric acid, and decimated the base metals industry, thus making it easier to obtain mining equipment.

Now gold companies are confidently projecting wider margins—which means more cash flow—and also an easier road to getting ounces out of the ground.

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