BMI View: The United States' mining sector will experience production declines in the coal, copper and lead industries due to structurally lower commodity prices and elevated operating costs in 2016. The country's gold industry will exp erience slight production growth; however , low gold prices will curb growth.
|e/f = BMI estimate/forecast. Source: BEA, BMI|
|Mining Industry Value, USDbn||108.47||93.77||85.69||84.67||87.04||89.55||91.80|
|Mining Industry Value, USDbn, % y-o-y||-15.24||-13.55||-8.62||-1.19||2.81||2.88||2.52|
Latest Updates & Structural Trends
The US, a top global coal producer, will experience a steady contraction over 2016 to 2020. We forecast US coal production to decline from 813mn tonnes (mnt) in 2016 to 787mnt by 2020. This forecast period will see the US' share of global coal production drop from 9.5% in 2016 to 8.4% by 2019 as countries with lower operating costs gain market share.
Weak commodity prices and elevated production costs will continue to pose major challenges to the country's mining sector as a whole. A number of significant legislative efforts to shift energy consumption to cleaner natural gas coming into effect will continue to raise production costs across the mining industry and particularly for coal miners. We expect US mining industry value to decline in 2016 and 2017 by 8.6% y-o-y and 1.2%, respectively, returning to minimal growth by 2018. In absolute terms, the US mining industry value will decrease from USD93.7bn in 2015 to USD85.7bn in 2016, climbing back up to USD91.8bn by 2020. The mining industry will account for less than half of one percent of US GDP during the forecast period.
Weak prices and elevated production costs will continue to drive both major and junior mining firms to defer and scale back major investments. As a result, the US mining industry will experience significant mothballing and retrenchment over the coming quarters.
Despite various headwinds, we expect that the US will remain a prominent long-term destination for global mining investment. We highlight the country's vast natural resources, well-developed mining industry and infrastructure and stable political environment, all of which will remain a draw for overseas miners. Furthermore, the country's mature capital markets allow junior firms to find financing opportunities, even if credit remains more constrained following the global financial crisis.
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.
BMI's United States 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 United States.
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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.