South East Asia Mining Report

Published 13 May 2015

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South East Asia Mining Report

BMI View: The cooling of the Chinese economy will remove the shine off mining investment in South East Asia . Frontier regions will be the first places where miners pull back their investment as brownfield projects take precedence . Nonetheless, it is certainly not all gloomy in the mining sector. Resilient demand from the power sector will continue to support growth in coal production, while Indonesia's export ban on unprocessed ores will help support bauxite prices.

Despite the rich deposits of untapped minerals on offer, we believe South East Asia's mining sector will struggle to uncover its potential over the coming years. The cooling of Chinese economic growth will remove a crucial pillar of support for mineral prices, particularly industrial metals such as iron ore and copper. For instance, we forecast iron ore prices to average USD60/tonne in 2015, even though it seems likely that prices will average below that in 2015. The outlook for gold mining is similarly precarious. We believe the bull run in gold prices is over and expect prices to average USD1,100/oz in 2015. This represents a 33% fall in prices compared with the average price of USD1,669/oz in 2012.

Less Shiny
Select Prices - Iron Ore (USD/tonne) & Gold (USD/oz)

We expect miners across the board to come under pressure from the squeeze in profit margins and rising demand for shareholders' returns. Crucially, frontier regions will be the first places where miners pull back their investment as brownfield projects take precedence. Many frontier markets in South East Asia are beset by a spate of challenges. These include the lack of infrastructure support, poor power supply and immature regulatory framework of countries such as Myanmar and Cambodia.

Hit By China Slowdown
Select Countries - Mining Industry Value, USDbn (% chg y-o-y)

Table of Contents

BMI Industry View
7
SWOT
9
Industry Forecast
10
Mining: Potential To Remain In The Ground
10
Table: Cambodia - Select Minerals Production ('000 metric tonnes)
10
Laos: Tough Digging With Fading Boom
12
Table: Laos - Copper & Gold Mine Production Forecasts
17
Myanmar: Resource Boom To Remain Elusive
17
Table: Myanmar - Select Mining Projects
19
Table: Myanmar - Mining Production Forecasts
22
South Korea: Uranium Production On The Horizon
22
Thailand: Struggles Ahead, Except Coal
26
Table: Thailand - Mining Production Forecasts
30
Mining: Coal Most Resilient Amidst Fading Boom
31
Gold Miners To Benefit
36
Table: Table: Vietnam - Mining Production Forecasts
37
Industry Risk Reward Ratings
38
Asia Risk/Reward Index
38
Table: Asia - Mining Risk/Reward Index
42
Laos Risk/Reward Index
43
Rewards
43
Industry Rewards
43
Country Rewards
43
Risks
43
Industry Risks
43
Country Risks
43
Myanmar Risk/Reward Index
44
Rewards
44
Industry Rewards
44
Country Rewards
44
Risks
45
Industry Risks
45
Country Risks
45
Table: Myanmar - Mining Production Forecasts
46
South Korea Risk/Reward Index
46
Rewards
46
Industry Rewards
46
Country Rewards
46
Risks
47
Industry Risks
47
Country Risks
47
Thailand Risk/Reward Index
47
Rewards
47
Industry Rewards
47
Country Rewards
47
Risks
48
Industry Risks
48
Country Risks
48
Table: Thailand - Mining Industry Value & Production Forecasts
49
Vietnam Risk/Reward Index
49
Rewards
49
Industry Rewards
49
Country Rewards
50
Risks
50
Industry Risks
50
Country Risks
51
Table: Vietnam - Mining Industry Value & Production Forecasts
51
Regulatory Development
52
Table: Asia - Mining Regulatory Scorecard
53
Commodities Forecast
55
Commodity Strategy
55
Ferrous Metals
55
Iron Ore: Price Weakness To Continue Over Coming Years
55
Steel: Oversupply To Drag Down Prices
57
Non-Ferrous Metals
60
Aluminium: Continued Weakness, But No Sharp Downturn
60
Copper: Recent Relief Rally To Fade
62
Lead: Prices Weakness To Continue
63
Nickel: Subdued Prices Due To Weak Demand Growth
64
Tin: Supply Deficits To Underpin Rally In Tin Prices
65
Zinc: Positive Multi-Year Outlook, But Increasing Risks In Months Ahead
66
Table: Select Commodities - Performance & BMI Forecasts
68
Competitive Landscape
69
Key Players
69
Table: Select Mining Companies In South East Asia - Key Financial Data
70
Company Profile
71
Banpu Public Company Ltd
71
Table: Banpu - Key Financial Data
73
Lanna Resources Public Company
74
Table: Lanna Resources - Key Financial Data
76
Regional Overview
77
Continued Domination Of Iron Ore Production
77
Indian Coal Consumption To Outperform
78
Table: Less Reliance On Coal
80
Indonesian Ban To Continue
80
Global Industry Overview
82
Global Overview
82
2
85
3
86
4
88
5
90
Methodology
92
Industry Forecast Methodology
92
Sources
93
Risk/Reward Index Methodology
94
Table: Weighting Of Indicators
95

The South East Asia 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 South East Asia 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 Thailand, South Korea, Myanmar, Vietnam.

Key Benefits

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

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc