BMI View: The United States' mining industry value will continue to contract through 2017, as muted production growth in the gold and copper sectors fails to offset sharp declines in coal output.
|e/f = BMI estimate/forecast. Source: BEA, BMI|
|Mining Industry Value, USDbn||133.50||126.40||130.20||113.80||98.10||92.00||94.20||95.90||98.20|
|Mining Industry Value, USDbn, % y-o-y||-1.75||-5.32||3.01||-12.60||-13.80||-6.18||2.31||1.87||2.42|
Latest Updates & Structural Trends
The US' mining industry value will decline through 2017, as elevated costs and structurally lower mineral prices weigh on growth. In particular, the declining coal sector, which accounts for nearly two thirds of the US mining industry value, will drag down mining industry value, which we forecast to contract by an average of 2.7% annually over 2016-2020. In absolute terms, we expect the US mining industry value to stagnate, totalling USD98.1bn in 2016 and USD98.2bn in 2020.
We forecast US coal production to continue to plummet, averaging a 20.0% contraction in 2016 and a steady rate of 2.5% over 2017-2020. In terms of volume, we expect the US to produce 653 million tonnes (mnt) of coal in 2016 and only 590mnt by 2020, compared to a peak of 1.1bn tonnes in 2008. The US coal industry will continue to see divestment, closures, bankruptcy and layoffs over the coming years.
We have revised up 2016 production growth forecasts for both gold and copper, on the back of improving gold prices and stronger-than-expected H116 results, respectively. US miner Newmont Mining will drive gold production growth in the country with expansions at two major mines expected to come online over the coming quarters.
Meanwhile, the lead industry will remain bogged down by weak prices and tightening environmental regulations. The US lead industry will also face headwinds from increasing competition from recycled products, as environmental awareness translates into sustainable development.
The November 2016 presidential elections will result in either the continuation and possible expansion of Obama's environmental legacy, or an immediate end to and possible dismantling of antagonistic policies toward coal, dependent on the success of the Democratic or Republic nominee, respectively.
The United States 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.
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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.
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Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the mining sector and within the broader political, economic and business environment.
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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:
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