BMI View: Mining output in the Philippines will continue to be severely affected by softening of Chinese demand for key mined metals, including nickel, copper and gold. Weakness in global prices for these minerals will deter investment in Philippines mining in the short-term; however, we maintain that the industry is well positioned for longer term growth as foreign miners look to take advantage of the country's sizeable and relatively untapped deposits, as well as low operating costs.
|e/f = BMI estimate/forecast. Source: BMI Calculation/UN|
|Mining Industry Value, USDbn||3.32||3.56||3.75||3.98||4.18||4.34|
|Mining Industry Value, USDbn, % y-o-y||3.00||7.00||5.50||6.00||5.00||4.00|
Latest Updates And Structural Trends
We have revised our production forecasts for Philippines metals production downwards in reflection of a sharper than expected fall in price levels for a number of commodities and the subsequent scaling back of domestic output. Philippines nickel production fell by more than 24% during the first 10 months of 2015, according to Bloomberg data, due to a collapse in Chinese demand, and we expect output to contract by about 6% in 2016.
One positive for nickel miners is the likelihood that Indonesia's government will extend the current ban on ore exports beyond 2017 as the country remains behind on its targets for developing local smelting capacity. A lack of competition from Indonesian producers will allow Philippine miners a considerable advantage in the market for low-grade nickel ore.
We have also adjusted our figures for copper production in response to the deterioration of the global price environment following our last projection. Average global copper prices are set to fall to USD5,400/tonne in 2016, while Philippines production will contract by 3.5%.
We have also revised our growth estimations for gold production, with global prices for the metals now set to average USD1,000/oz over 2016. Philippines gold output will expand by 1.4% in 2016, down from about 12% in 2015.
In January 2016, St. Augustine Gold and Copper Limited announced that the Philippine Government had approved the Declaration of Mining Project Feasibility (DMPF) for the King-king Copper-Gold Project located in Mindanao. The mine project is expected to produce 5.6mn oz (moz) of gold over its lifespan.
The Philippines 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 Philippines 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 Philippines.
- Use BMI's independent industry forecasts on Philippines to test other views - a key input for successful budgeting and planning in this mining market.
- Target business opportunities and risks in Philippines's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in Philippines.
- 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.