Economic Tides, KIS market principles, Risk Tools, and LiDAR Insights

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Hey – David here. In this edition of DRIFFT you’ll get:

💡What’s New: Where the economic tide is taking us.

🤔 Opinion: A simple approach to the mining markets.

🛠️ Tools & Data: to help you define your risk.

🎓 Tutorial: How to work with drones and LiDAR data.

Want to feature your service or product in DRIFFT? Grab an ad spot here.

💡What’s new

Taking a fresh look at markets to understand where there’s value.

• The US and China elbowing for undersea territory–internet cables and mining.

• GOOG launches 3D map tiles as tech giants compete on digital twins

• If you are mining, look sharp because you are being watched.

• Global powers attempt to limit China’s control of battery metals.

• Who is mining oceans? Here’s an undersea metals supplier list.

• Argentina will profit if Chile miscalculated an increase in royalties.

• Why buy high-res satellite imagery when there’s super resolution AI?

• Have a mining project you want to finance? Here’s how.

• It’s time for staking claims as prices (read inflation) rise.

• US stuck between environmental goals and zero-emission targets.

• Interesting: EY never mentioned uncertain supply in their 2021 list of mining challenges.

• Will batteries break the back of big oil or turn them into miners?

• Billionaires sprouting from resources and manufacturing instead of tech.

• How soon will you be citing environmental justifications for your car purchase decision?

• Examples of how large a role volatility plays in mineral markets.

• How does the anticipated worldwide economic slow down affect China’s economy?

• Would a shift in global goods production towards India mean a mineral boom there?

🤔 Opinion

Looking to profit from the increase in demand for battery metals? So was everyone else–3 years ago. In recent years there has been a sharp increase in the amount of information published online about mineral investing. You can bracket a Google search by year and see for yourself.

It means you’re not early to the party. But you’re not late either.

My opinion for anyone interested in finding opportunities in this space is to Keep It Simple.

1. Do your homework. Key terms you should be familiar with in the context of mining include project finance, debt, equity, net present value. You should be familiar with cost, revenue, and reporting norms. Recognize macro factors on high and low timeframes–for example, falling global growth means a reduction in demand for minerals. Always know who’s on the other side of the negotiating table–the players you’re playing against.

2. Select an area you want to try. It should be simple to access and easy for you to learn. Metal exchanges, futures contracts, and equities are all readily available.

3. Define your risk. Avoid big losses. This is critical. Make sure you define how much is on the line and cap it at your comfort level.

4. Execution / Management is critical. If you’re longing (not a misspelling), ignore the news. But if you’re actively trading, you need to know when markets shift so you can respond. Understand what financial measures are available and set targets for risk management.

5. Rinse and repeat. The only way you learn is to keep trying.

Here’s a simple big-picture overview of what makes the mining industry work.

🛠️ Tools and Data

Ways opensource can help you define your risk and analyze opportunities.

1. PyPortfolioOpt - implements traditional and cutting-edge efficient frontier portfolio optimization techniques, https://pypi.org/project/pyportfolioopt/

2. Gee Community Catalog - a validation dataset for identifying mines in satellite data, https://gee-community-catalog.org/projects/global_mining/

3. Geostats Guy - tons of great resources from a geostatistics professor at Uni of Austin, https://github.com/GeostatsGuy?tab=repositories 

4. Monaco - easily run Monte Carlo simulations and sensitivity analysis, https://pypi.org/project/monaco/ (or try https://github.com/FilipeChagasDev/PyMCSL)

5. SciPy - foundational module to easily implement and deploy cutting edge analytics, https://scipy.org/

🎓 See What’s Possible

One thing every day for 365 days makes you unstoppable.

Recent webinar tutorial on collecting and processing LiDAR data with drones.

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Know someone looking to level-up their AI and opensource game in mining? Just copy and paste this link: https://drifft.beehiiv.com 

I am here for you. Want me to look into a specific topic? Email your suggestions to get in touch.

Dig deeper,

David