West Africa Mining Report

Providing expert analysis, independent forecasts and competitive intelligence on the mining.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Petrochemicals Risk Reward Index, Economic Forecasts, Company Profiles and Global, Regional and Country Industry Overviews.

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West Africa Mining Report
Product Price
$1,295.00

BMI View: West Africa's growth outlook will weaken on the back of c ontinued mineral price weakness, inadequate infrastructure and the aftermath of the Ebola outbreak over the coming quarters. T he region's long-term growth outlook remains promising due to countries' vast untapped mineral reserves, positive foreign investment outlook and infrastructure developments.

Select Countries - Mining Industry Forecast
2015e 2016f 2017f 2018f 2019f 2020f
e/f= BMI estimate/forecast. Source= National Sources, BMI
Guinea Mining Industry Value, USDbn 1.38 1.39 1.50 1.65 1.77 1.89
Guinea Mining Industry Value, USDbn, % y-o-y -2.86 0.80 7.61 10.04 7.41 6.79
Sierra Leone Mining Industry Value, USDbn 0.77 0.67 0.68 0.70 0.71 0.73
Sierra Leone Mining Industry Value, USDbn, % y-o-y -24.63 -13.38 1.90 2.00 2.10 2.20
Liberia Mining Industry Value, USDbn 0.20 0.17 0.18 0.19 0.21 0.23
Liberia Mining Industry Value, USDbn, % y-o-y -21.04 -15.88 1.77 8.27 9.49 9.32
Mali Mining Industry Value, USDbn 0.69 0.63 0.60 0.62 0.67 0.74
Mali Mining Industry Value, USDbn, % y-o-y -13.41 -9.16 -4.42 3.77 7.66 9.61
Ghana Mining Industry Value, USDbn 3.38 3.45 3.33 3.43 3.54 3.66
Ghana Mining Industry Value, USDbn, % y-o-y 1.90 2.00 -3.57 3.05 3.41 3.39
Mauritania Mining Industry Value, USDbn 0.54 0.47 0.47 0.50 0.54 0.58
Mauritania Mining Industry Value, USDbn, % y-o-y -20.42 -13.23 0.29 6.58 7.29 7.14

Latest Developments & Structural Trends

  • In 2015, Rusal announced the signing of a Multi-User Operation Agreement on existing railway infrastructure at the Company's Dian-Dian project in Guinea. The Agreement allows the transportation of bauxite, including that mined at Dian-Dian, using the existing railway infrastructure in the Boke province and creates an environment for the further development of project transport infrastructure.

  • Guinea's iron ore production will be supported by Rio Tinto's partnership with the Guinean government to construct a maritime terminal and the 'Trans-Guinean Railway'. The railway will link south-east Guinea with the coast along the Southern Growth Corridor and will be essential for iron ore transport from the Simandou mine.

  • An USD46.4bn IMF disbursement, announced on November 17 2015, will enable Sierra Leone to honour its fiscal commitments and carry out its post-Ebola Recovery Plan in 2016. The disbursement will provide Sierra Leone much needed resources to implement its post-Ebola Recovery Strategy as well as enable the country to avoid fiscal meltdown in 2016. The release of funds under the watchful eye of the IMF will strengthen policy continuity and transparency in the policymaking process. However, risks to social stability will see short-term political risk remain a moderate concern ( see: 'IMF Loan Will Lend Support To Political Stability' 25 November, 2015).

  • We revised down our iron ore production forecast for Sierra Leone in light of a resurgence of the Ebola virus and continued iron ore price weakness. We forecast iron ore prices to average USD52/tonne during 2016-2020, averaging significantly lower than USD115/tonne during 2011-2015. As such, we revised down our production growth forecast from 22.0% to 15.0% and 17.0% to 15.0% in 2016 and 2017, respectively. Following a output contraction of 48.0% in 2015, we forecast output to recover modestly, averaging 12.8% y-o-y during 2016-2020.

  • We have revised down our Mauritania gold production forecast down from 1.1% to -1.0% for 2016. Weak gold prices will continue to hurt miners' profit margins, resulting in retrenchment and scaling back of operations over the coming quarters. For instance, Kinross Gold's gold operations within the country continue to struggle from weak gold prices. On September 18, the company laid off 225 people at the firm's Mauritanian operations, citing weak gold prices. Earlier this year, Kinross suspended an USD1.6bn expansion plan for the firm's Tasiast mine, which would have allowed the mine to process 38,000 tonnes (kt) a day, compared to 7kt now. The Tasiast mine posted an USD65mn loss over 2014, and is set for even higher losses over 2015. Kinross acquired the mine in 2010, as part of the firm's USD7.1bn takeover of Red Back Mining.

  • We have revised our gold production growth forecast for Cote d'Ivoire up from 14.0% to 18.0% for 2016 and from 8.5% to 9.5% for 2016 and 2017, respectively. This follows the country's strong 38.0% surge in production during 2015 to 880koz, up from 630koz in 2014. We forecast Cote d'Ivoire's gold production will increase from 1.0moz in 2016 to 1.2moz by 2020, with annual production growth averaging 6.0% during 2016-2020.

  • On January 25, the Liberian government announced a 11.0% cut in the country's 2015-2016 budget on the back of a slowdown in the country's mining sector. The reduction will result in a slowdown in public sector investment, most notably the country's infrastructure sector. As such, we except Liberia's inadequate infrastructure to remain a persistent challenge for the country's mining sector. We forecast that Liberia will post real GDP growth of 2.0% in 2016, rising to 2.7% in 2017. This is a far cry from the 10-year average of 7.7% registered between 2009 and 2014 ( see: 'Post-Ebola Recovery Will Take Time', August 28 , 2015).

  • On October 2, 2015, Alecto Minerals and Desert Gold Ventures completed a joint internal scoping study with the intention of developing a low-cost gold operation, with output totalling 400 000 ounces per annum. This project will combine both Alecto's Kossanto East gold project and Desert Gold's Farabantourou gold project. This supports our view that the country's gold production growth will be supported by new projects beyond our forecast period to 2019.

  • Gold mining firm Ran d gold Resources has ended a contract for redeveloping AngloGold Ashanti's Obuasi gold mine in Ghana. The move follows efforts by both the companies to improve the project's returns. The companies had announced a deal in September 2015 to form a joint venture to redevelop and operate the mine. Randgold had agreed to lead and fund a development plan designed to rebuild the operation. As such, we revised our gold production forecast for Ghana down from -1.6% to -2.5% and 0.5% to -1.0% for 2016 and 2017, respectively.

BMI Industry View
7
Table: Select Countries - Mining Industry Forecast
7
Latest Developments & Structural Trends
7
SWOT
9
Industry Forecast
11
Guinea Bauxite: Set For Solid Growth
11
Latest Developments
11
Table: Guinea - Bauxite Production & Growth
11
Table: Guinea - New Projects
12
Structural Trends
13
Political Risks To Outlook
15
Guinea Iron Ore: Modest Growth Ahead
16
Latest Developments
16
Table: Guinea - Iron Ore Production & Growth
16
Structural Trends
16
Table: Guinea - New Iron Ore Projects
18
Risk To Outlook
20
Sierra Leone: Growth To Recover In The Long Term
21
Latest Developments
21
Table: Sierra Leone - Iron Ore Production & Growth
21
Structural Trends
22
Mauritania: Gold To Contract, Iron Ore To Be Weak
25
Latest Developments
25
Table: Mauritania - Mine Production & Growth
25
Structural Trends
26
Price Weakness To Subdue Investment Outlook
28
Table: Mauritania - New Iron Ore Mining Projects
29
Infrastructure Weakness To Dampen Growth Outlook
30
C-te d'Ivoire Gold: New Projects To Support Growth
31
Latest Developments
31
Table: Cote d'Ivoire - Gold Production Forecast
31
Table: C-te d'Ivoire - Largest Gold Projects
31
Structural Trends
32
Liberia Iron Ore: Weak Prices To Dent Growth
35
Latest Developments
35
Table: Liberia - Iron Ore Production Forecast & Growth
35
Table: Liberia - New Iron Ore Projects
36
Structural Trends
37
Business Environment To Remain Relatively Stable
39
Mali Gold: Growth To Pick Up Beyond 2018
40
Latest Developments
40
Table: Mali - Gold Production Forecast
40
Structural Trends
41
Ghana Gold: Price Weakness To Subdue Growth
43
Latest Developments
43
Table: Ghana - Gold Production & Growth
43
Structural Trends
43
Government Shows No Sign of Easing Taxes
46
Industry Risk Reward Ratings
49
Guinea Risk/Reward Ratings
49
Rewards
49
Industry Rewards
49
Country Rewards
49
Risks
49
Industry Risks
49
Country Risks
50
Liberia Risk/Reward Index
50
Rewards
50
Industry Rewards
50
Country Rewards
50
Risks
50
Industry Risks
50
Country Risks
51
Africa: Major Risks Remain
51
Key Takeaways
51
Latest Revisions
52
Table: Africa - Mining Risk/Reward Index
54
Regulatory Development
55
Commodities Forecast
59
Commodities Outlook
59
Table: BMI Commodities Price Forecasts
59
Competitive Landscape
60
Table: West Africa: Key Mining Companies' Financial Metrics
60
Structural Trends:
61
Company Profile
62
Global Company Strategy - Randgold Resources - Q2 2016
62
Latest Financial Results
66
Table: Randgold Resources - Key Financial Data
67
Global Company Strategy - AngloGold Ashanti - Q2 2016
68
Overview
69
Strategy
69
Risks
70
Latest Results
71
Table: AngloGold Ashanti - Key Financial Data
72
Global Company Strategy - Rio Tinto - Q2 2016
73
Company Overview
75
Company Strategy
76
Table: Rio Tinto - Key Projects
79
Latest Financial Results
79
Table: Rio Tinto - Key Financial Data
80
Regional Overview
82
Table: SSA - Government Involvement In Mining Sector
87
Methodology
89
Industry Forecast Methodology
89
Sources
90
Risk/Reward Index Methodology
91
Table: Weighting Of Indicators
92

The West Africa 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 West Africa 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 Ghana, Cote d`Ivoire, Mauritania, Sierra Leone, Liberia, Mali, Guinea.

Key Benefits

  • Use BMI's independent industry forecasts on Ghana, Cote d`Ivoire, Mauritania, Sierra Leone, Liberia, Mali, Guinea to test other views - a key input for successful budgeting and planning in this mining market.
  • Target business opportunities and risks in Ghana, Cote d`Ivoire, Mauritania, Sierra Leone, Liberia, Mali, Guinea's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in Ghana, Cote d`Ivoire, Mauritania, Sierra Leone, Liberia, Mali, Guinea.
  • 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.