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Fisher Investments finds as demand surged to unprecedented levels from 2003 to 2007, supply struggled to keep up. Haunted by past cycles, producers refused to aggressively expand production. Even after finally recognizing the scope of demand growth and growing investment in new developments, Fisher Investments research uncovers that expansion was held back by a host of factors, including:
- Lack of skilled labor
- Lack of equipment
- Infrastructure bottlenecks and declining ore grades
- The shift to less developed regions
- Regulation and nationalization
- Power constraints
- Labor strife
- Environmental regulations
By the time firms decided to expand, they found the previous 15 years of underinvestment throughout the industry had resulted in a
severe lack of experienced and skilled workers. Greg Wilkins, CEO of Barrick Gold, the largest gold producer in the world, said in the
company's Q4 2006 conference call, "asked what's one of the biggest things that keep you awake at night, my answer is really people, because the industry is short of good quality people." *
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