BMI View: Brazil's mining industry will be supported by strong production growth in the country's iron ore sector. Despite this, gold and tin production growth will slow due to continued price weakness.
|e/f= BMI forecast. Source: BMI Calculation/IBGE|
|Mining Industry Value, USDbn||60.2||51.3||49.4||53.5||58.1||62.4|
|Mining Industry Value, USDbn, % y-o-y||-22.7||-14.7||-3.7||8.3||8.5||7.4|
Latest Developments & Structural Trends
Iron ore will be Brazil's mining industry's growth bright spot due to the sector's low production costs, and a strong output growth strategy from Brazilian mining giant Vale. We expect Brazil's share of global iron ore production to increase and grow from 11.0% in 2015 to 12.4% in 2019, with the sector's output reaching 416mnt by 2019 from 352mnt in 2015.
Production resumed in early September at Cleveland Mining's Premier gold mine after completion of the first phase of its expansion, and Vale received permission to restart operations at its Onca Puma Nickel mine in late August after a dispute involving indigenous communities was resolved.
Brazil's mining output growth will be supported by lower input costs, due to a strong US dollar and local market crash. We expect the Brazilian real to continue to depreciate against the dollar. While emerging market weakness, particularly China, will curb demand, this dynamic also incentivizes production, as input costs are priced in local currency and commodities are sold in US dollars.
Vale will remain focused on increasing low-cost production to maximize output, crowding out higher-cost junior miners. For instance, Vale's cash costs fell in Q215 to USD15.1/tonne from USD23.2/tonne in Q115, well below our forecasted 2015 iron ore price of USD60.0/tonne. We forecast prices will average lower year-on-year (y-o-y) in 2015 at...
The Brazil Mining Report has been researched at source and features Business Monitor International (BMI)'s mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.
BMI's Brazil Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in Brazil.
- Use BMI's independent industry forecasts on Brazil to test other views - a key input for successful budgeting and planning in this mining market.
- Target business opportunities and risks in Brazil's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in Brazil.
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BMI Industry View
Summary of BMI’s key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.
Industry SWOT analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the mining sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
- Mining industry: Industry size (USDmn), real growth (%), % of GDP, employment (‘000), workforce as % of total workforce, average wage (USD).
- Output: Production volumes (‘000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
- Exports: Value of exports (USDmn) for all major metals, minerals, ores and gems mined in each state.
- Commodity markets: Global demand, supply, stocks and benchmark prices (USD) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.
BMI’s Mining Risk Reward Index
BMI’s Risk Reward Indices provide investors (mining companies and support service providers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Competitive Landscape Tables & Analysis
Comparative company analyses and tables detailing USD sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Mining reports are based on an extensive network of primary sources, such as multilateral organisations (UN, WB, IMF), national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.