BMI View: Brazil's iron ore sector will drive the country ' s mining industry growth, supported by low operating costs and vast reserves. Meanwhile, consistently weak mineral prices will weigh on production growth in other sectors.
|e/f = BMI estimate/forecast. Source: BMI, IBGE|
|Mining Industry Value, USDbn||58.55||43.70||37.27||36.77||39.63||42.19||44.88|
|Mining Industry Value, USDbn, % y-o-y||-24.77||-25.37||-14.72||-1.34||7.78||6.47||6.37|
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 from 11.5% in 2016 to 14.5% by 2020, with the sector's output reaching 459mnt in 2020 from 359mnt in 2016.
While Brazil's iron ore production growth will not be significantly affected by the Samarco dam burst in November 2015, the country's mining sector will come under tightening environmental regulation. Increased political will to pass the overhaul of Brazil's mining regulatory framework, which has been stalled in Congress since 2013, will include legislation targeting the regulation of mine tailings dams.
We have downgraded our bauxite production growth forecast from 3.0% to 1.0% in 2016, due to the country's declining aluminium output and weak price environment. Beyond 2016, we expect growth to accelerate as Norsk Hydro's Paragominas mine continues to ramp up production.
Major mining and metals producers operating in Brazil will face headwinds from a deepening economic recession, structurally lower commodity prices, high debt loads and corruption scandals. Firms will target lowering spending, closing or divesting from high-cost assets and reducing employment. For instance, on February 16, Anglo American announced the details of its large-scale restructuring plan, including the eventual sale of the USD9.0bn Minas Rio iron ore mine in Brazil.
The Brazil Mining Report has been researched at source and features BMI Research'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.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.
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.