BMI View: Russia's g old and coal production growth will be the sector's relative bright spots , while P GM's and iron ore output growth will grind to a halt . Low metal prices , the country's inadequate infrastructure and Western sanctions will continue to limit the sector's production growth.
|e/f = BMI estimate/forecast. Source: National sources, BMI|
|Mining Industry Value, USDbn||153.90||144.80||153.90||160.50||169.00||175.10|
|Mining Industry Value, USDbn, % y-o-y||-17.68||-5.86||6.27||4.29||5.29||3.62|
|e/f = BMI estimate/forecast. Source: National sources, BMI|
|Mining Industry Value, USDbn||153.90||140.20||145.90||153.40||160.70||167.40|
|Mining Industry Value, USDbn, % y-o-y||-17.68||-8.87||4.08||5.10||4.80||4.17|
Latest Developments & Structural Trends
The gradual re-orientation of Russia's coal exports from Europe to Asia will be driven by growing demand for both thermal and coking coal in the latter region ( see 'Russia Eyes The East', February 10 2015).
Russia's gold production growth will slow as the country's unfavourable regulatory environment towards foreign investment will deter new miners from entering the sector and limit new projects from coming online. While we expect gold prices to edge higher, prices will not recover to 2011-2014 heights over our forecast period to 2020.
We expect gold prices to continue edging higher in the coming quarters, as weak economic growth and higher inflation keep real interest rates low in major developed markets. We have slightly raised our 2017 average price forecast from USD1,350/oz to USD1,400/oz.
We have revised up our iron ore forecasts to 2020. We expect iron ore prices to average USD53.0/tonne during 2016 and USD45.0/tonne in 2017, up from our previous forecasts of USD48.0/tonne and USD43.0/tonne, respectively. Our upwards revision is predicated on the strong H116 iron ore price rally due to increasing demand from Chinese steel mills ( see: 'Iron Ore: Prices To Retest Lows In 2017', August 2).
Besides low palladium prices, the Russian government will continue to have an influential role in dictating the amount of palladium supply exiting the country, thus restricting the sector's growth prospects. Moreover, the country's high barriers to entry and restrictive regulation will discourage foreign miners from entering the mining sector.
The country's platinum output growth will contract and average an annual 0.5% decline during 2016-2020, due to both declining ore grades and a lack of new projects coming online over the coming years. We forecast the country's annual output growth to contract slightly during 2016-2020. We expect Russia's platinum production to decrease from 0.81moz in 2016 to 0.79moz by 2020.
The Russia 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 Russia 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 Russia.
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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.