The collapse in oil and coal prices isn’t just bad news for the energy industry. It’s also compounding a global surplus in metals.
Ores are extracted with diesel-engine diggers and trucks, while smelters that process metal run on electricity from coal-fired power plants. Energy accounts for as much as a third of the industry’s costs at a time when everything from aluminum to zinc is mired in a prolonged slump and more mines are losing money. With oil tumbling about 70 percent in the past two years to less than $30 a barrel, cheaper fuel is allowing metals companies to delay production cuts needed to halt their own slide in prices.
