Malaysia Mining Report

Published 02 July 2015

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Malaysia Mining Report

BMI View: Malaysia's mining sector is facing into a more modest growth output than the one seen in recent years. Falling mineral prices have been eating increasingly into the profitability of the country's miners, leading many firms to scale back production as well as explora tion and development. That said the continued presence of major miners across the gold and tin sub-sectors will ensure that output from both segments continues to grow over the forecast period, albeit at a slower rate to that seen in recent years.

We forecast Malaysia's mining industry to reach USD43.25bn by 2019, increasing at a steady clip of 5.0% per annum. Despite significant deposits of untapped minerals and positive reforms by the Malaysian government in recent years, a resource boom is unlikely to catch up with the country anytime soon. In contrast to the relentless pursuit of volume growth over the past decade, mining firms are focusing on the development of their core brownfield assets on the back of waning mineral prices and the economic slowdown in China.

Resource Boom A Distant Memory
Malaysia - Mining Industry Value
e/f = BMI estimate/forecast. Source: UN data, BMI calculation

In our view, Malaysia's tin mining sector is unlikely to stage a comeback anytime soon. Depleting reserves and falling ore grades will continue to take their toll on production and we forecast tin output to increase at an average rate of 1.7% per annum between 2015 and 2019. Malaysia Smelting Corporation (MSC) will continue to dominate the tin sector with its mining subsidiary Rahman Hydraulic Tin (RHT) operating the largest open-pit tin mine in Malaysia. The miner enjoys significant economies of scale compared with other small, artisanal domestic mines and will remain the driving force in terms of tin production going forwards. The fact that the company has scaled back considerably on its overseas mining and smelting operations in recent years, suggests that it will continue to derive a steady...

BMI Industry View
7
SWOT
10
Industry Forecast
12
Gold: Major Producers To Weather The Storm
12
Table: Malaysia - Select Gold Mining Projects
14
Table: Gold Production Forecast (Malaysia 2011-2019)
17
Tin: Price Slump Adds To Weak Growth Outlook
17
Table: Tin Production Forecast (Malaysia 2012-2019)
20
Industry Risk Reward Ratings
21
Asia Risk/Reward Index
21
Table: Asia - Mining Risk/Reward Index
25
Regulatory Development
26
Key Details
26
State Mineral Enactment A Boon For Miners
27
Table: Breakdown Of Mining Licence
27
Table: Breakdown Of Prospecting & Exploration Licence
27
Tax Regime
27
Corruption Remains A Key Concern
28
Table: Malaysia - Political Overview
29
Commodities Forecast
30
Commodity Strategy
30
Ferrous Metals
30
Iron Ore: Price To Remain Under Pressure In 2015-2016
30
Steel: Subdued Prices Until 2017
32
Non-Ferrous Metals
35
Copper: Subdued Outlook, Despite Recent Rally
35
Lead: Prices Weakness To Continue
37
Nickel: Subdued Prices Due To Weak Demand Growth
38
Tin: Supply Deficits To Underpin Rally In Tin Prices
39
Zinc: Positive Multi-Year Outlook, But Increasing Risks In Months Ahead
40
Table: Select Commodities - Performance & BMI Forecasts
42
Competitive Landscape
43
Company Profile
45
Malaysia Smelting Corporation Berhad
45
Table: MSC - Key Financial Data
47
Monument Mining
48
Table: Monument Mining - Key Financial Data
49
Regional Overview
50
Continued Domination Of Iron Ore Production
50
Indian Coal Consumption To Outperform
51
Table: Less Reliance On Coal
53
Indonesian Ban To Continue
53
Global Industry Overview
55
Global Overview
55
1
56
2
58
3
59
4
61
5
63
Methodology
65
Industry Forecast Methodology
65
Sources
66
Risk/Reward Index Methodology
67
Table: Weighting Of Indicators
68

The Malaysia 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 Malaysia 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 Malaysia.

Key Benefits

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