beyond pt 0 23/1

etter informed market ensures that the prices will continue to fluctuate.
More efficient markets are likely to reduce the size of fluctuations rather
than remove them.
Use of new technology, such as satellite technology, is already being used
may help to lower exploration costs. E-commerce presents a platform
for relaying that information and perhaps reducing costs through
information sharing.
Opportunities for lower billing; payment costs, cost of information
transfer, etc. from using online payment mechanisms is already occurring
in the industry.
On the whole, considering the main business of mining and delivery of
mining products, disintermediation is simply not possible for some
intermediary functions in the supply of minerals to processors such as
drilling and digging tasks and shipping. Although e-commerce may help
facilitate these actions, they are not likely to change in nature.
13.4 New costs
New costs of e-commerce will be due to re-intermediation in the supply
chain, likely to be in the form of technology requirements to link in with
global trading forums, establishing or altering existing trading systems,
changing information systems, employment of IT personnel, education
and training and retraining. These costs are not likely to be large and are
likely to be accommodated within the existing medium to long term
capital expenditure plans for the sector.
13.5 New business models
It is likely that the core of wealth creation in mining is information and
making the best use of the information at hand. Finding mineral deposits,
identifying when and how to extract them commercially, assessing market
conditions and opportunities and managing costs are all information
intensive activities.
Similar to other industries techniques which enhance knowledge
management, including many e-commerce approaches, could assist in
boosting the competitiveness of firms in this sector. It will also be a factor
separating those that thrive and those that don’t. That said, it is not clear
that the greater use of e-commerce in this sector will introduce as
profound a change as is expected in other sectors.
Largely in response to declining commodity prices and oversupply in
global commodity markets, some listed smaller mining companies are
undergoing a structural change to reshape themselves into Internet stocks.
In a trend known as ‘Backdoor Listing’, these companies are using
existing listings to purchase IT start up companies and then relisting as IT
companies on the ASX. Two other drivers for this activity are the desire
to acquire a slice of the new business and to attract new shareholder
funds i.e. issue new shares. Share prices as a result of backdoor listing
have increased significantly, in some cases tripled. (See Box 13.2)
While there is the expectation that the cyclical nature of the market will
make resource stocks profitable again, in the mean time there are returns
to be made in technology stocks, and some Australian miners are
diverting their activities as they wait for the rebound.
185