Having a Profit Center of Fuel and Mineral Trading is Already Essential for the Mining Companies and the Skillsets they Need

Abstract

Price uncertainties are increasing as diverse buyers and sellers are coming into the fuel and minerals market. There are supplyside uncertainties due to resource depletion, supply chain problems, and prolonged wars and conflicts. Uncertainties enhance risk. Moreover, standard trading practices in the minerals and oil and gas industries like long-term supply agreements with rigid price–fixing mechanisms are being challenged by short-term trading agreements and contracts where the price rigidities are non-existent; the market determines the price on the basis of the supply of buyers and sellers in an open market. Moreover, the market for derivatives of minerals and oil and gas is becoming more pronounced as the various uncertainties to secure materials supply are growing. In order to tread in the unknown waters of flexible trading, the mining companies can think of opening a profit center with qualified people to tide over the challenges and to gather knowledge of the trading system, which will also influence how the financing of the project investments would take place in the future.