Abstract

cyclical industry is sensitive to the business cycle. Revenues are generally higher in periods of economic growth and are lower in periods of economic downturn. Mineral price cycles mean that mining companies’ expenditure on exploration and investment can vary considerably. Price fluctuations also have a significant effect on fiscal revenues, exchange rates and employment levels of countries rich in metals and minerals. The reasons for price cycles lie in the high volatility of demand for metal and mineral commodities and inflexible supply responsiveness. Demand for metals and mineral commodities is highly sensitive to changes in the rate of economic growth, partly because of the characteristics of the economic sectors in which these commodities are used.