China Mining Report

Published 18 May 2015

  • 115 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,295.00
China Mining Report

BMI View: Chinese mining consolidation will continue over the coming quarters due to weak global minerals prices and government supporting consolidation.

We expect China's mining sector to become increasingly consolidated in the coming quarters for the following reasons.

  • First, weak mineral prices will price-out high-cost producers. We believe weak mineral prices will continue to pressure Chinese high-cost producing miners over the coming quarters. While state-owned firms are generally more insulated from the weakness in commodity prices, the economic slowdown in China will diminish the financial resources of these firms, forcing them to cut-back capital expenditures over the coming quarters.

  • Second, government-supported industry consolidation. Beijing's pledge to instil more supply discipline in heavy industry will reduce the number of miners operating within the country. For instance, China's target is to eliminate 97.2mnt of coal over the next five years through the closure of 2,791 small coal mines. Similarly, Chinese policy makers are attempting to tame excess production in the steel sector through a series of forced closures and consolidation.

  • Third, stricter governmental environmental regulations. The government's attempt to curb pollution will put pressure on small-scale low grade ore miners operating within China.

China Slowdown To Drag On Mineral Prices
Select Commodity Prices (% chg y-o-y)

While cooling Chinese economic growth will adversely impact mining operations, we expect the impact to vary across different mineral segments. Lead and tin mining production growth will decline less strongly than iron ore and copper, due to continued, albeit moderate demand growth for these metals. We expect iron ore and copper production growth will decline significantly due to their heavy usage in the construction industry.

Overseas Mining To Continue, Despite Economic Slowdown

Depleting reserves, falling ore grades and the relatively short life span...

Table of Contents

BMI Industry View
7
Table: China - Capacity Elimination Tasks For 2014
8
Table: China - Select Global Mining Deals
10
SWOT
11
SWOT
11
Industry Forecast
13
Bauxite: Persistent Seaborne Reliance
13
Growth To Slow, But Production Won't Collapse
14
Seaborne Reliance Not Going Away
14
Risks To Production Outlook
15
Table: Bauxite Production Forecast (China 2010-2018)
16
Coal: Consolidation To Gather Steam
16
Table: China - Select Coal Mining Projects
21
Table: Coal Production Forecasts (China 2010-2018)
24
Copper: Domestic Shortfall To Sustain Overseas Push
24
Table: China - Select Copper Projects
26
Table: Copper Production Forecast (China 2010-2018)
26
Gold: Five Precious Themes
27
Table: China - Overseas Gold Mining Deals
35
Table: Gold Production Forecast (China 2010-2018)
36
Iron Ore: Consolidation Ahead
36
Table: Iron Ore Production Forecast (China 2010-2018)
41
Nickel: Cooling Growth As China Rebalances
41
Table: China - Select Nickel Projects
43
Table: Nickel Production Forecast (China 2010-2018)
43
Tin: Yunnan Tin To Drive Growth
43
Risks To Outlook
45
Table: Tin Production Forecast (China 2010-2018)
46
Lead: Autos Sector To Provide Tailwinds
46
Table: China - Select Lead Mining Projects
48
Table: Lead Production Forecast (China 2010-2018)
48
Zinc: Mining Under Pressure
49
Table: Zinc Production Forecast (China 2010-2018)
51
Industry Risk Reward Ratings
52
Asia - Risk Reward Index
52
Australia Leads, Frontier Markets To Remain Laggards
52
An Improving Regulatory Landscape
53
Largest Quarterly Change In India
54
Table: Asia - Mining Risk/Reward Index
55
China - Risk Reward Index
56
Rewards
56
Industry Rewards
56
Country Rewards
56
Risks
57
Industry Risks
57
Country Risks
57
Table: Mining Industry Forecasts (China 2010-2018)
58
Regulatory Development
60
Table: Political Overview
62
Commodities Forecast
64
Commodity Strategy
64
Ferrous Metals
64
Non-Ferrous Metals:
67
Aluminium: Price Headwinds To Persist Despite Market Tightness
67
Copper: Bounce To Prove Temporary
68
Nickel: Multiple Price Headwinds To Persist
70
Zinc: No Sustained Gains
73
Table: Select Commodities - Performance And BMI Forecasts
75
Competitive Landscape
76
Table: China - Key Financial Data For Select Listed Mining Companies
77
Company Profile
78
Aluminum Corporation of China (Chalco) - Q115
78
Company Overview
79
Latest Financial Results
79
Table: Supply Chain Analysis
81
Table: Chalco - Key Financial Data
82
China Shenhua Energy
83
Table: Shenhua Energy - Supply Chain Analysis
85
Table: Shenhua Energy - Key Financial Data
86
Jiangxi Copper
87
Table: Supply Chain Analysis
89
Table: Jiangxi Copper - Key Financial Data
90
Shandong Gold
91
Table: Supply Chain Analysis
93
Table: Shandong Gold - Key Financial Data
94
Regional Overview
95
Global Industry Overview
102
Unearthing The Key Mining Themes In 2015
102
Methodology
112
Industry Forecast Methodology
112
Sources
113
Risk/Reward Index Methodology
114
Table: Weighting Of Indicators
115

The China 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 China 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 China.

Key Benefits

  • Use BMI's independent industry forecasts on China to test other views - a key input for successful budgeting and planning in this mining market.
  • Target business opportunities and risks in China's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in China.
  • 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.

Coverage

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.

Key Projects

Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.

Company Profiles*

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.

Sources

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.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc