Mining Industry and Binary Options Trading

Minerals in binary options tradingMinerals and their derived products are the foundation of many important industries. Mines and quarries can be found in almost every country all around the world. Mining industry products provide most of the needed energy, from electricity in homes and industries, to fuel in cars, machinery and tools.

Resources obtained from mines are also used as inputs for raw materials, consumer goods as well as for almost all services and processes provided by other industries, such as: manufacturing utilities, agriculture, constructions, communication, and transportation. Mining has an important impact on the labor market, economy, society and environment. In many countries, mining represents a significant sector of the economy and a basis for currency growth and substantial investments.

Mining industry meets a great number of challenges. One of these is the environmental impact. This impact is significant, long-lasting and starts to become a considerable issue for the society and world’s economy. Because of this, mining industry must perfectly combine the safety of its operations with a qualitative productivity, including an efficient strategy for the management of risks and a sustainable environment protection.

Types of mining processes

The mining process is classified into two kinds: surface mining, or pit mining and underground mining, also known as sub-surface mining,

Surface mining

surface miningIt is the type of mining in which soil and rocks covering the mineral deposits are removed. It is more advantageous because it costs less and has more accessible operations. On the earth’s surface, there are notable deposits of ores and minerals such as phosphate, nickel, sulphine, lateritic and copper, all of these being the result of weathering and groundwater.

Nevertheless, surface mining makes use of large areas of the earth, which are temporarily displaced, as a result. This type of mining is usually a source of numerous of environmental problems, from soil erosion to dust, water pollution and noise, along with some impacts on ecological balance.

Underground mining

underground miningUnderground mining, on the other hand, refers to different techniques used to excavate hard minerals, mainly those with metal content such as ores containing: copper, iron, nickel, lead, zinc, tin, silver and gold. It is also used to excavate gems such as diamonds.

This method is often dangerous and pricier than surface mining. Underground mining is composed of two types of techniques: mining of the soft rock and mining of the hard rock. Mining of the underground soft rock is applied to obtain oil sand, oil shale, salt and coal.

Meanwhile, mining of the underground hard rock is commonly used to extract hard minerals such as tin, gold, iron, silver, lead, copper, nickel, manganese, phosphates and quartz, etc.

Other processes in mining

minerals mineAfter the actual mining process, ores and minerals are manufactured and refined, so that they become usable products ready to be placed in the market. This involves the separation of the ore or mineral from the enclosing rock and processing them through various stages and levels, in accordance to the percentage of impurities of each type of mineral.

The mining process also includes developing strategies for risk management. Each company must elaborate a risk management strategy to evaluate the risks for each mining phase, guarantee the best conditions of work safety and be able to apply the required precautions relevant to any distinct situation. The risk management strategy must also take into consideration the safest mining methods and responsible surveillance and control of the workers to enable them to use safe equipment and emergency plan in case of unexpected situations.

The last necessary step is the environmental component. Each company must consider the impact of their mining activities on the environment. If in the past years, the environment was not given sufficient attention in the mining policies, nowadays this is a compulsory aspect of the mining process. Accordingly, the mining company must have an environmental policy to ensure the least impact on the local biodiversity.

Each mine site is unique as to its workplace, installations and underground tools and machinery. Its uniqueness largely depends on the various types of mineral deposits they extract, location and geological formations. Also, diverse economic considerations, such as the search for market on a particular mineral or the availability for investment funds must be taken into account.

Trading Mining on Binary Options Platforms

Ores and minerals are essential products and mineral deposit is considered a valuable asset, as reflected in investments rates, trades and lately, in binary options trading. As an important industry, mining influences the market directly and indirectly. The direct results can be seen in the price of gold and silver and other commodities, as well as some currencies (such as the Australian Dollar which strongly correlates with Gold) and indices and of course the share prices of companies that are involved in mining.

Binary options are quite new on the financial market but its platforms provide methods of investing in the mining industry without needing large capital.

As a concept, binary options are rather simple. Two types of binary options are identified. The most usual one is the “high-low” binary option, or the fixed-return option.  Binary option traders can invest on how they anticipate the market will perform during a specific time period.

You can trade commodities such as Gold and Silver, currency pairs, indicies, and individual companies such as Apple, whose manufacturing process is also dependent on the mining industry, with most binary options brokers.

There are just two potential outcomes in binary option trading, which can also be applied to the mining industry. That is, if the traders’ put or call option ends up agreeing with the market price at the time the period expires (known as strike price), they will receive a return on their investment, a generous one of 70% and up depending on the binary contract.  If the traders’ acquisitions do not fit with the market price, they will lose their. initial investment.

In conclusion, if you decide to place trades on mining companies or correlated assets, the best way is to start is to focus on a specific asset such as Gold or Silver and than keep taking notes on development of mining companies and the industry as a whole. Also, by following the economic calendar you will be able to find out about worldwide industrial production and manufacturing outputs, both of which may also influence future prices or raw materials.

Trading binary options to mining industry presents the same challenges as normal margin trading. The trade execution is different but one is equally required to do the necessary research and keep abreast with new industry developments. In addition, a sensible trader will also look at technical analysis and trading charts to support his/her decisions.

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