Poll: The Adventures of Donald Trump and the Mining Sector

Donald Trump has championed himself as a friend of mining in the US, whether it be through words — like his support of the coal industry in the east — or his actions — like through his winding back of national monuments to open up mining exploration in the west.

He is now more than halfway into his term, and it’s been quite a journey. Even if you ignore other events (and actions) in his presidency, his mining-related intentions are up against hurdles ranging from economic to activist, while prices leave much to be desired.

At the Vancouver Resource Investment Conference (VRIC) on January 20 and 21, the Investing News Network (INN) conducted an unscientific straw poll, asking representatives from base, precious metal and energy companies operating in the US whether Trump had been good for the industry overall.

The question was: “Has Trump been good for the mining sector (so far)?”

The answer was a resounding “yes,” but — with many qualifications, mainly around his conduct.

Answer the poll question yourself now, and read on for insights.

Of a dozen companies approached, eight said he was good for the sector, while four said he was positive with negative drawbacks.

Lower tax rates was given as the primary reason from a few mining representatives — the sweeping tax cuts in 2017 cut the corporate tax rate to 21 percent.

One representative said that the better tax regime was “90 percent” of any benefit he brought to the industry, while another credited him with higher job creation.

A common theme from answers was regulation: the administration has moved to slash the regulatory process and speed up lease renewals for mines — which the industry liked.

Some sectors had obviously had a different experience with the new take on regulation though.

“(Trump) said he’d make it easier to get permits … major actions he could take have not been taken yet.”

They said that for their sector, “expectations are high, but we haven’t seen anything yet.”

Another representative said that while Trump was appreciated for his sentiments towards mining, his actions were bad for prices — effectively canceling out any positives.

“How Trump conducts himself in office can be a detriment to everything he does,” said another.

One representative flipped between an outright no, and conceding that “what is good for gold is economic uncertainty — which he brings in spades.”

Continuing on from that, representatives said Trump was “good for gold” because it rises during turbulent times — but it was not any sort of endorsement for the US president and his policies.

“He brings and fosters economic uncertainty — brought on by his trade wars and his adamant pursuit of a wall.

“All he knows is how to be a bully.”

Another representative said that while Trump might be helping gold, his attitude towards green technology was possibly hurting sentiments in the battery metals sectors.

Indeed, over the course of 2018 base metals suffered greatly for a number of reasons; but all had a common trigger in the trade war. Analysts polled by INN on the fortunes of copper, zinc, iron, lead and nickel all mentioned the US-China relationship, while precious, battery and industrial metals had similar turbulent years.

Independent Speculator Lobo Tiggre told INN that appreciating words while being wary of actions made sense.

“The trade war has trashed commodities prices big time, metals and energy included. A more pro-resource administration doesn’t help if underlying prices tank.

“Precious metals would be the exception there, of course; the fear trade would be good for gold.”

Financial analyst Jayant Bhandari had a mix of opinions agreeing and disagreeing with comments INN got from miners, saying that Trump “will attempt to reduce regulations that delay permitting of projects that unnecessarily hamper them.”

Trump’s trade war however is something that Bhandari said was a good thing for both the US and China.

“Realignment of relationship with China — which I see as inevitable — will lead to better economic output in both the countries. China by opening up import of western goods will improve and the US will grow by exporting of its high-tech goods. After short-term pain, China will be a better country because of what Trump wants it to accept.”

Finally, he said that Trump’s behavior was actually one of his better strengths, saying that his behavior was not detriment but “extremely, extremely important” in negotiating deals through Washington, DC and bringing more recalcitrant regimes like North Korea to the table.

Bhandari concluded that the background noise is just a result of Trump having “far too many enemies.”

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.