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Oil Claims Another Victim as Cheap Fuel Keeps Metals Glut Going

  • Drop in energy costs eases pressure on mines to reduce output
  • Metals surplus expands as China slowdown curbs world demand
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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.