Slowdown Puts Mining Outfits in Deep Hole

China's drop in demand further drives down commodities
By Jim O'Neill,  Newser User
Posted Nov 17, 2008 8:43 AM CST
Miners finish their shift at a cooperative mine in Potosi, Bolivia. Bolivian mines are freezing operations as falling metal prices cripple a key industry in South America's poorest country.   (AP Photo)
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(Newser) – Mining companies are shutting down production, laying off workers, and trying to sell excess product as the global economic slowdown drills into the industry’s profits, reports the Wall Street Journal. Metal prices dropped a record 35% last month, and nearly every mineral has been hit. Mining, once an economic shooting star, has fallen back to Earth.

Commodity prices are plummeting as lagging demand—especially from the once-booming Chinese market—makes many mining operations money losers. The always-volatile industry hasn’t been helped by speculation from hedge funds and other investors, who’ve accelerated the commodities slump by pulling out funds to pay off other obligations as a result of the overall financial crisis.