Business Monitor International


Australia Mining Report

Published 26 September 2014

  • 124 pages
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$1,295.00
Australia Mining Report

BMI View: Australia's mining sector is set to suffer the painful spillover effects of a sharp investment slowdown due to the cooling of China's economy over the coming years.

Australia has been among the biggest beneficiaries from the China-led commodities boom over the past decade, attracting huge amounts of investment into the minerals space. Driven by China's voracious appetite for key commodities such as coal and iron ore, the value of Australia's mining industry had increased by more than six-fold from USD24bn in 2003 to USD154bn in 2013. As a result, this has seen the sector's share of GDP rising from 4.5% to 10.2% over the same period. However, the boom years in the mining industry is over. With China's economy on course for a rude slowdown over the coming years, Australia's mining sector is set to suffer the painful spillover effects of a sharp investment slowdown.

Boom is Over
Australia Mining Industry Value & Growth (2011-2018)

We believe Australia will be the biggest loser from the mineral imports shift in China ( see 'Minerals Import Squeeze: Bittersweet Outcomes', July 17 , 2013). The latter commands a prominent role in Australia's exports of key commodities including coal and iron ore. Already, the mining sector is feeling the crunch of plummeting commodity prices as a string of miners scale back their ambitions and slam the brakes on investment. The rising tide of economic nationalism, declining labour productivity and aggressive minimum wage legislation will compound the challenges in the mining industry, amplifying the downshift in Australia's economy going forward ( see 'Tough Times Ahead, What Can Replace The Mining Boom', May 03 , 2013). We expect the value of Australia's mining sector to reach USD187bn by 2018, growing at an annual average rate of 4.0% over our forecast period. This contrasts with an average growth rate of 21.7% per annum over the past decade.

Heavy Chinese Exposure
Australia - Exports of Iron Ore (LHS) & Coal (RHS) By...

Table of Contents

BMI Industry View
7
SWOT
10
Industry Forecast
12
Bauxite: Weipa To Drive Growth, But Risks Lurk
12
Table: Australia - Select Bauxite Projects
14
Table: Australia - Bauxite Production (2010-2018)
14
Coal: Dark Days Ahead For Miners
15
Table: Australia: Select Coal Projects
19
Table: Coal Production Forecast (Australia 2010-2018)
19
Copper: Cooling Prospects
20
Table: Australia - Largest Copper Projects
21
Table: Copper Production Forecast (Australia 2010-2018)
22
Gold: Golden Years Are Over
23
Table: Australia - Largest Gold Mining Projects
24
Table: Gold Production Forecast (Australia 2010-2018)
24
Iron Ore: Majors Steeled For Expansion
25
Table: Australia - Select Iron Ore Projects
28
Table: Australia - Iron Ore Production Forecast
31
Lead: Modest Expansion In Sight
32
Table: Lead Production Forecast (Australia 2010-2018)
34
Nickel: Modest Growth Ahead
34
Table: Australia - Select Nickel Projects
36
Table: Nickel Production Forecast (Australia 2010-2018)
36
Tin: Outlook Brightening
37
Table: Tin Production Forecast (Australia 2010-2018)
38
Zinc: Output To Collapse As Century Mine Ends
39
Table: Zinc Production Forecast (Australia 2010-2018)
41
Industry Risk Reward Ratings
42
Risk/Reward Ratings
42
Table: Asia - Mining Risk/Reward Index
46
Risk/Reward Ratings
46
Rewards
47
Industry Rewards
47
Country Rewards
47
Risks
48
Industry Risks
48
Country Risks
48
Table: Australia - Mining Industry Value & Production Forecasts
49
Regulatory Development
50
Table: Australia - Mineral Taxes
51
Table: Asia - Mining Regulatory Scorecard
54
Table: Australia - Political Overview
54
Commodities Forecast
56
Commodity Strategy
56
Iron Ore: Not Much Respite In Sight
56
Steel: Production Rationalisation Too Slow To Provide Price Upside
58
Aluminium: Further Price Rally Unlikely
59
Lead: Ripe For A H214 Boost
60
Copper: Consensus Moving Our Way
61
Nickel: Price Surge To Abate Further
62
Tin: In A Sweet Spot
63
Zinc: Bullish Short-Term Picture
64
Table: Select Commodities - Performance & BMI Forecasts
66
Competitive Landscape
67
Table: Financial Data For Key Mining Firms Listed In Australia
68
Company Profile
69
BHP Billiton
69
Latest Financial Results
71
Table: BHP Billiton - Key Financial Data
73
Glencore Xstrata
74
Latest Financial Results
76
Table: Glencore Xstrata - Key Financial Data
78
MMG Limited
79
Table: MMG Limited - Key Financial Data
82
Rio Tinto
83
Company Overview
85
Company Strategy
86
Latest Financial Results
87
Table: Rio Tinto - Key Financial Data
88
BHP Billiton
88
Latest Financial Results
91
Table: BHP Billiton - Key Financial Data
93
MMG Limited
94
Table: MMG Limited - Key Financial Data
97
Regional Overview
98
Asia - Q3 2014
98
Challenges
98
Opportunities
101
Global Industry Overview
106
Challenges
106
Table: Mining - Select M&A Deals
110
Cause For Optimism
113
Methodology
120
Industry Forecast Methodology
120
Sources
121
Risk/Reward Rating Methodology
122
Table: Weighting Of Indicators
124

The Australia Mining Report has been researched at source and features Business Monitor International (BMI)'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 Australia 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 Australia.

Key Benefits

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

Business Environment Rankings

BMI's Mining Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (mining companies and support service providers) in the regional mining market. The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry rankings products.

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.

BMI Industry Forecasts

Historic data series (2009-2012) and forecasts to end-2018 for all key industry and economic indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast. Indicators include:

  • Mining Industry: Industry size (US$mn), real growth (%), % of GDP, employment ('000), workforce as % of total workforce, average wage (US$).
  • 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 (US$mn) for all major metals, minerals, ores and gems mined in each state .
  • Commodity Markets: Global demand, supply, stocks and benchmark prices (US$) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.

BMI Macroeconomic Forecasts

BMI forecasts to end-2018 for all headline macroeconomic indicators, including real GDP growth (%), inflation (%), fiscal balance (% of GDP), trade balance (US$bn), current account (US$bn) and external debt (US$bn).

Competitive Landscape Tables & Analysis

Comparative company analyses and tables detailing by US$ sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.

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.

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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