Why Bankruptcy Might Be the Mining Industry's Last Best Hope

For the world’s ailing metals-mining industry to have any hope of a turnaround, more producers may have to go belly up.

Companies that dig up everything from gold to copper have failed to stem a prolonged collapse in mineral prices mostly because not enough mines are closing. Years of increased output have created global surpluses just as slower economic growth erodes demand. Unprofitable operations were kept alive by across-the-board cuts in operating costs, lower energy prices, a strong dollar and the unfulfilled hopes by mining executives that markets will improve.