Jessica Elzea Kogel: An Interview With The 2013 SME President

What is your personal view and assessment of the overall health of the industry in the current global economy? The economic outlook remains soft for the near future and, although the global economy is showing signs of recovery, uncertainty has tempered the pace of recovery. In addition to uncertainty, we are still facing significant economic challenges in many parts of the world, including Europe and the United States. The rapid expansion of China?s economy has recently slowed, further contributing to the sense of uncertainty in the overall health of the global economy. This situation is both a blessing and a curse, depending on which sector of the mining industry we are considering. For example, coal, industrial minerals, aggregates, base metal and precious metals markets are impacted by different forces and drivers and will experience different outcomes within the same economic environment. Let me give a few concrete examples to illustrate this concept. The prevailing economic uncertainty that I have just described tends to drive investors toward safe havens. Gold has historically been viewed as a safe haven and as long as investors shy away from traditional investments, gold prices will remain high and gold mining companies will continue to expand and invest capital in their operations. The same sluggish economy that drives gold prices higher has the opposite effect on other segments of the minerals industry. A great example of this is industrial minerals and aggregates used in construction. The markets that consume these minerals have contracted significantly over the past five years. The outlook for this segment is poor, as the glut of available housing continues to inhibit demand for new construction and, thus, many industrial minerals. In addition to this, the federal government?s lack of political will to enact long-term legislation funding transportation and infrastructure projects continues to be a drag on the U.S. aggregates industry.