Peru Mining Report

Published 24 June 2015

  • 84 pages
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  • Includes 3 free updated quarterly reports
$1,295.00
Peru Mining Report

BMI View: Peru's mining sector growth will be driven by both a strong project pipeline, by both domestic and international firms, encouraged by the country's strong investment and regulatory framework for miners. However, increasing public protests regarding Peru's mining sector will delay new projects from coming online.

Peru's mining sector should see further growth over the next five years on account of its significant untapped reserves and open investment framework. Peru will still remain a significant global producer of several base and precious metals, and we expect continued diversification as miners explore and develop new deposits. Copper projects accounting for the largest proportion of new mine projects and expansions. The Peruvian government estimates that the country's current mining projects pipeline totals over USD75bn. The sector is dominated by global copper mining majors including Southern Copper (a division of Grupo Mexico), Freeport McMoRan and Glencore Xstrata, which are boosting output by both expanding existing operations and undertaking new investment projects.

Continued friction between the public and mining corporations, concerning the environmental and social impact of the mining industry, will delay new projects from coming online. The Peruvian government estimates that the country's current mining projects pipeline totals over USD75bn, meaning that continued unrest will have considerable effects within the country. Nevertheless, Peru will remain a significant global producer of several base and precious metals, and we forecast the value of Peru's mining industry will grow from USD23.2bn in 2015 to 27.2bn in 2019. This would represent average growth of 3.4% year-on-year (y-o-y) over 2015-2019, significantly slower than 14.9% y-o-y over 2010-2014.

Modest Growth Ahead
Peru - Mining Industry Value (USDbn) & Growth y-o-y (%)
e/f = BMI estimate/forecast. Source: National Sources, BMI

Policy Moderation To Accommodate Miners

BMI Industry View
7
SWOT
10
Industry Forecast
12
Copper: Solid Growth, But Risks To Downside
12
Positive Growth Outlook
13
Table: Peru - Select Copper Projects
14
Downside Risks Dominate
16
Table: Copper Production Forecast (Peru 2014-2019)
17
Gold: Growth To Rebound By 2017
17
Hochschild and Buenaventura To Dominate Sector
18
Risks To Downside
19
Table: Gold Production Forecast (Peru 2014-2019)
20
Lead: Moderate Growth Ahead
21
Table: Lead Production Forecast (Peru 2014-2019)
22
Silver: Production To Remain Behind Mexico
23
Table: Peru - Key Silver Projects
24
Risks Slated To Downside
24
Table: Silver Production (Peru 2014-2019)
25
Tin: Minsur Investment To Support Growth
25
Export Restrictions & Demand To Encourage Minsur Production
26
Table: Tin Production Forecast (Peru 2014-2019)
27
Zinc: Peru To Lead Zinc Production In The Americas
27
Table: Peru - Key Zinc Projects
29
Table: Zinc Production Forecast (Peru 2014-2019)
29
Industry Risk Reward Ratings
30
Peru Risk/Reward Index
30
Rewards
30
Industry Rewards
30
Country Rewards
30
Risks
31
Industry Risks
31
Country Risks
31
Table: Mining Industry Forecasts (Peru, 2014-2019)
32
Americas Risk Reward Index
32
Regional Risks Increase Modestly
32
Weak Prices To Hurt, While Stronger Dollar A Mixed Blessing
33
Regional Outlook Unchanged Despite Some Reordering
34
Table: Americas - Mining Risk/Reward Index
35
Regulatory Development
36
Recent Developments
36
Further Tension Between Miners & Local Communities
36
Open Investment Framework
36
Trade & Investment Risk Analysis
37
Commodities Forecast
40
Commodity Strategy
40
Ferrous Metals
40
Iron Ore: Price To Remain Under Pressure In 2015-2016
40
Steel: Subdued Prices Until 2017
42
Non-Ferrous Metals
45
Copper: Subdued Outlook, Despite Recent Rally
45
Lead: Prices Weakness To Continue
47
Nickel: Subdued Prices Due To Weak Demand Growth
48
Tin: Supply Deficits To Underpin Rally In Tin Prices
49
Zinc: Positive Multi-Year Outlook, But Increasing Risks In Months Ahead
50
Table: Select Commodities - Performance & BMI Forecasts
52
Competitive Landscape
53
Table: Financial Data - Key Mining Firms Listed In Peru
53
Gold & Silver Prospects Face Headwinds
54
Company Profile
55
Buenaventura
55
Latest Results
57
Table: Buenaventura - Key Financial Data
57
Global Company Strategy - Grupo M-xico - Q315
58
Table: Grupo M-xico - Key Financial Data
60
First Quantum
61
Latest Results
64
Table: First Quantum: Key Financial Data
64
Regional Overview
66
Three Key Themes For Americas Mining
66
Regulatory Changes Still On The Cards
66
Dollar Strength And Oil Price Weakness To Push Down Costs
67
Southern Growth To Outpace North
68
Global Industry Overview
70
Global Overview
70
1
71
2
73
3
74
4
76
5
78
Methodology
80
Industry Forecast Methodology
80
Sources
81
Risk/Reward Index Methodology
82
Table: Weighting Of Indicators
83

The Peru 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 Peru 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 Peru.

Key Benefits

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