A Primer on alt data in mining
As mining industry analysts, we have witnessed firsthand the information asymmetry that often occurs in the sector.
Sorting through this asymmetry is difficult in the mining industry, where operations are often remote, companies and staff are disconnected from society, and access to information is limited.
Traditional financial metrics, such as revenue, earnings, and assets, are important indicators of a company's financial health. However, these metrics do not always provide a complete picture of a company's financial situation, particularly in the resource sector. Alternative data sources can provide valuable insights into a company's operations and help fill the information gap.
A conceptual framework of this asymmetry ( Zhang et. al.)
COmmon sources of alt data
Satellite imagery can be used to monitor a company's mining operations and assess the volume of material being extracted. This information can provide a more accurate estimate of a company's production capacity and potential for growth. Satellite imagery can also be used to monitor environmental impacts and compliance with regulations, providing valuable information for investors who are concerned with sustainability and social responsibility.
Social media activity, including online forums, blogs, and news articles, can provide insights into a company's reputation and public perception. This information can be particularly useful in the resource sector, where companies often operate in remote locations and have limited direct engagement with local communities. Social media activity can provide a window into the public perception of a company and its operations, and can help investors assess the company's risk and reputation.
Weather patterns can also play a significant role in the metal mining industry. Extreme weather conditions, such as floods or droughts, can impact a company's production capacity and disrupt its operations. By monitoring weather patterns, financial analysts can get a better understanding of the potential impact of weather on a company's operations and assess the company's risk.
A new frontier in alternative data
At Woven Mining, we focus on all of the above data sources, but also on providing our users access to high quality technical and financial documentation from mining companies.
Alternative data sources can provide valuable insights into a company's operations and financial health, and can help fill the information gap that often occurs in the resource sector. Financial analysts who are looking to assess publicly traded mining companies should be incorporating alternative data into their analysis.
