Romania Mining Report

Published 03 July 2015

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Romania Mining Report

BMI View: The expansion of Romania's mining sector will be sluggish over the next few years as a declining coal industry and local opposition to mining projects limits potential growth in minerals output. Good news on the horizon is Eldorado Gold's Certej gold mine, which is set to come online from 2016.

Romania has significant mineral reserves with the country boasting some of the largest coal and gold deposits in Europe. Production levels are among the highest in Central and Eastern Europe (CEE), however, growth is slowing due to a combination of factors including falling coal grades, compliance EU carbon emissions targets and opposition to mining activity at both a community and government level.

In particular the production of Brown coal, also known as lignite, is set to decrease gradually through our forecast period to end-2019 as EU CO2 emissions legislation forces the government to reduce the contribution of coal-fired power plants to the country's energy mix. Total coal production has halved over the past two decades and is expected to continue its decline over the long term as mines and coal-fired plants are gradually taken out of service. That said, there is some interest in the country's coal-mining facilities from foreign investors, including those from China and the US.

Modest Growth Prospects
Romania: Mining Industry Value & Production Growth Forecasts
e/f = BMI estimate/forecast. Source: USGS, BMI

The outlook for Romania's gold-mining sub-sector is more positive. Mining activity is scheduled to begin in 2016 at Certej mine in the western region of the country, eventually adding as much as 140,000 metric tonnes of additional production capacity over the next few years. 80% of the mine is owned by Canada's Eldorado Gold with the remaining stake held by the Romanian government. A positive feasibility study was completed at the mine in June 2015. However, the Rosia Montana gold mine, which promised to be the largest of its kind in Europe, will now...

BMI Industry View
7
SWOT
9
Industry Forecast
11
Gold: Certej Key Hope For Output Growth
11
Table: Romania - Key Gold Projects
14
Table: Gold Production Forecast (Romania 2011-2019)
14
Coal: Falling Grades To Lead Gradual Decline
15
Table: Coal Production Forecast (Romania 2012-2019)
19
Industry Risk Reward Ratings
20
Europe Risk Reward Index
20
Czech Republic Under Pressure
21
Modest Uptick For Finland
21
Table: Europe - Mining Risk/Reward Index
22
Regulatory Development
23
Tax Regime
24
Corruption A Major Concern
24
Commodities Forecast
27
Commodity Strategy
27
Ferrous Metals
27
Iron Ore: Price To Remain Under Pressure In 2015-2016
27
Steel: Subdued Prices Until 2017
29
Non-Ferrous Metals
32
Copper: Subdued Outlook, Despite Recent Rally
32
Lead: Prices Weakness To Continue
34
Nickel: Subdued Prices Due To Weak Demand Growth
35
Tin: Supply Deficits To Underpin Rally In Tin Prices
36
Zinc: Positive Multi-Year Outlook, But Increasing Risks In Months Ahead
37
Table: Select Commodities - Performance & BMI Forecasts
39
Competitive Landscape
40
Company Profile
42
Mechel
42
Table: Mechel - Financial Data
44
Eldorado Gold
45
Table: Eldorado - Financial Data
47
Regional Overview
48
Europe's Four Key Mining Themes
48
Coal: Regional Stagnation, Yet Bright Spots Remain
48
Currency Weakness To Impact Trade Dynamics
50
Steel Oversupply To Curb Growth
51
Rare Earth Production To Shift Westwards
53
Global Industry Overview
55
Global Overview
55
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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 Romania 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 Romania 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 Romania.

Key Benefits

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