Business Monitor International


Brazil Mining Report

Published 01 April 2014

  • 101 pages
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  • Includes 3 free updated quarterly reports
 
$1,295.00
Brazil Mining Report

BMI View: With the boom years over and our expectation for Chinese metal demand growth to slow, we expect Brazil's mining sector to see slower average growth rates through 2018 compared with previous years. The country's large untapped reserves and relatively small mining sector relative to the larger Brazilian economy will allow for growth opportunities though, and we expect production gains for both domestic and foreign producers. Iron ore will drive sector investment, but both base metals and gold will see continued interest.

We expect mine output to grow through 2018 despite our forecast for metal prices to either average lower or see relatively minimal growth. Of greatest salience to the Brazilian mining sector is iron ore, which we forecast will average US$115/tonne in 2014 and US$105/tonne in 2015, lowering the value per unit of mined output. Still, we expect iron ore miner Vale to increase output given both that its cash costs range between US$30-50 per tonne and shipping costs to China, while comparatively more expensive than iron ore from Australia, remain competitive.

Brazil Still Cost-Competitive
Select Countries - Iron Ore Shipment Cost To China (US$/tonne)

Crucially though, we forecast a secular downward trend in iron ore prices through 2018. Since iron ore makes up around 85% of the country's total mining export value, our iron ore price forecast underpins our expectation for slower sector growth in the years ahead. We believe Chinese economic growth will trend lower as steel-intensive fixed asset investment shifts to more domestic consumption. Brazilian iron ore producers, heavily exposed to China, are likely to see demand growth slow.

Iron Grip
Global - New Iron Ore Supply By Region (as % share of total output)

Table of Contents

BMI Industry View
7
SWOT
9
Industry Forecast
11
Bauxite: Growth Despite Market Weakness
11
Consortium Of Foreign Firms Dominate Production
11
Risks To Outlook
12
Table: Brazil - Bauxite Production & Growth Forecasts
13
Gold: Brazil To See Small Gains
13
Table: Select Greenfield Gold Projects
13
Weak Prices Remain Top Risk
14
Table: Brazil - Gold Production
16
Iron Ore: Growth To Continue Despite Weakening Chinese Demand
17
Brazil Well Situated To Increase Production
17
Bearish China View Underpins Subdued Forecast
19
Risks To Outlook
20
Table: Brazil - Iron Ore Production
21
Nickel: Growth To Continue
22
Table: Brazil - Key Nickel Projects
22
Risks To Outlook
23
Table: Brazil - Nickel Production
24
Tin: Brazil To Capture Larger Share Of Market
24
Table: Brazil - Tin Production Forecasts ('000 tonnes)
26
Industry Risk Reward Ratings
27
Developed Markets Show Low Risk, But Low Reward
28
Majors Facing Combination Of Tax Changes & Social Opposition
29
Second-Tier Miners To Show Little Rankings Improvement
30
Table: Americas - Mining Risk/Reward Ratings
31
Market Overview
32
Iron Ore To Remain Industry Leader
33
Further Sector Diversity In Coming Years
35
Risks To Outlook
36
Table: Brazil - Mining Industry Value And Production
37
Regulatory Development
38
Recent Developments
38
Significant Mineral Deposits, But Regulatory Environment Imposes Difficulties
38
Royalty Increase At Crucial Market Juncture
38
Licensing And Permitting Challenges Perennial Issue
39
Tax Regime
39
Corruption Remains Major Concern
40
Table: Brazil - Political Overview
40
Table: Regional Regulatory Ratings
41
Commodities Forecast
43
Commodity Strategy
43
Iron Ore: Fading Iron Will
43
Steel: Global Glut To Weigh On Prices
45
Aluminium: Fundamentals To Remain Weak
46
Copper: All Eyes On China
47
Lead: Outperforming Its Troubled Peers
48
Nickel: Monthly Outperformer
50
Tin: Outperforming A Weak Field
51
Zinc: Further Consolidation Likely
52
Table: Select Commodities - Performance & BMI Forecasts
53
Competitive Landscape
55
Table: Financial Data For Key Firms Listed In Brazil
55
Foreign Firms Find Luck Outside Of Iron Ore
56
Golden Opportunities May Become Tarnished
56
Company Profile
57
Alcoa
57
Recent Financial Data
60
Table: Alcoa - Key Financial Data
61
Anglo American
62
Company Strategy
65
Latest Results
66
Table: Anglo American - Financial Data
67
Vale
68
Company Overview
70
Company Strategy
71
Recent Financial Performance
72
Table: Vale - Key Financial Data
73
Company Details
73
Regional Overview
74
Americas Overview
74
1
74
Table: Americas - Regulatory Updates
75
2
75
3
76
4
80
Global Industry Overview
82
Methodology
94
Industry Forecast Methodology
94
Sources
95
Risk/Reward Rating Methodology
96
Table: Mining Risk/Reward Ratings Indicators
98
Table: Weighting Of Indicators
99

The Brazil 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 Brazil 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 Brazil.

Key Benefits

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

Executive Summary

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 Ratings

BMI's Mining Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (mining companies and support service providers) in the regional mining market. The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry Ratings 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-2017 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-2017 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