China Mining Report

Published 29 July 2015

  • 104 pages
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  • 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...

BMI Industry View
7
Overseas Mining Investment To Continue, Despite Economic Slowdown
8
SWOT
10
SWOT
10
Industry Forecast
12
Bauxite: Growth To Cool, Dependency To Rise
12
Bauxite Growth To Slow
12
Imports: Growth In Short Term And Long Term
13
Risks To Production Outlook
15
Table: Bauxite Production Forecast (China 2011-2019
15
China - Coal: Regulations To Result In Contraction
16
Environmental Regulation To Squeeze Miners
17
Government To Push Consolidation
19
Weak Margins To Subdue Growth
21
Table: China - Select Coal Mining Projects
21
Energy Production To Remain Coal Dominated
21
Table: Coal Production Forecasts (China 2012-2019)
23
China - Copper: Low Price To Provide Headwinds To Domestic Production
24
Table: China - Select Copper Projects
25
Table: Copper Production Forecast (China 2011-2019)
26
Gold: Five Precious Themes
27
Table: China - Overseas Gold Mining Deals
32
Table: Gold Production Forecast (China 2011-2019)
33
Iron Ore: Further Consolidation Ahead
34
Price Weakness To Hurt Miners
35
Small-Scale Miners To Come Under The Most Pressure
36
Strict Regulations To Increase Import Preference
37
Table: Iron Ore Production Forecast (China 2011-2019)
39
Nickel: Modest Domestic Growth, But Imports To See Further Upside
40
Further Consolidation
41
Table: China - Select Nickel Projects
42
Risks To Outlook
42
Table: Nickel Production Forecast (China 2011-2019)
43
Tin: Yunnan Tin To Drive Growth
44
Risks To Outlook
46
Table: Tin Production Forecast (China 2011-2019)
46
Lead: Growth To Stagnate
47
Table: China - Select Lead Mining Projects
48
Risks To Outlook
48
Table: Lead Production Forecast (China 2011-2019)
48
Zinc: Mining Under Pressure
49
Table: Zinc Production Forecast (China 2011-2019)
51
Industry Risk Reward Ratings
52
China Risk Reward Index
52
Rewards
52
Industry Rewards
52
Country Rewards
52
Risks
53
Industry Risks
53
Country Risks
54
Table: Mining Industry Forecasts (China 2011-2019)
54
Asia Risk/Reward Index
55
Table: Asia - Mining Risk/Reward Index
59
Regulatory Development
60
Trade And Investment Risk Analysis
61
Commodities Forecast
65
Industrial Metals: Remaining Below-Consensus
65
Chinese Demand To Remain Weak Despite Stimulus
66
Tightening Market Balance To Support Price Recovery
67
Competitive Landscape
69
Majors Firms
69
Table: China - Key Financial Data For Select Listed Mining Companies
70
Company Profile
72
Global Company Strategy - Aluminum Corporation of China (Chalco) - Q3 2015
72
Company Overview
74
Latest Financial Results
75
Table: Supply Chain Analysis
76
Table: Chalco - Key Financial Data
77
Jiangxi Copper
78
Table: Supply Chain Analysis
80
Table: Jiangxi Copper - Key Financial Data
81
Shandong Gold
82
Table: Supply Chain Analysis
84
China Shenhua Energy
85
Table: Shenhua Energy - Supply Chain Analysis
87
Regional Overview
89
Continued Domination Of Iron Ore Production
89
Indian Coal Consumption To Outperform
90
Slowing Demand From China
91
Indonesian Ban To Remain In Place
92
Global Industry Overview
94
Global - Mining 2015 Key Themes Revisited
94
Table: Key Mining Themes For 2015
94
Theme: Mining Capital Expenditure Will Continue To Decline
94
Theme: US Dollar Strength
95
Iron Ore Consolidation & Majors Share To Increase
96
Asian Investment In Africa To Continue
97
2015's Standouts
98
Methodology
100
Industry Forecast Methodology
100
Sources
101
Risk/Reward Index Methodology
102
Table: Weighting Of Indicators
103

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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