Business Monitor International


Brazil Mining Report

Published 24 December 2014

  • 85 pages
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$1,295.00
Brazil Mining Report

BMI View: Brazil's mining industry value growth to 2018 will not match that of the previous decade due to subdued mineral prices in the years ahead. Still , mine output will expand as both domestic and foreign firms continue to exploit the country's significant reserves of both industrial and precious metals.

Mine output growth in Brazil will remain solid, particularly for iron ore, despite weak prices. While we forecast iron ore prices will average lower year-on-year over the coming years, at USD75/tonne in 2015 and USD80/tonne in 2016, Brazilian firm Vale will continue to take advantage of its low unit costs and seek to increase its global market share. Vale cited cash costs around USD23/tonne in Q314, with costs dipping to as low as USD11/tonne for certain mine assets. In the years ahead, we forecast iron ore mine output will grow at an average annual pace of 4.3% to 2018. Shipping times and costs to China are longer and higher compared with Australian iron ore producers though, which may lead to Australian producers capturing a greater share of the Chinese iron ore import market.

Production Growth Despite Weak Prices
Global - Iron Ore Price & Change

We expect Brazil's total mining industry value to see only modest growth averaging 1.2% per annum to 2018 despite solid growth in iron ore output. Ultimately, our bearish iron ore price outlook underpins our modest industry value forecast as iron ore makes up around 85% of the country's total mining export value. We believe Chinese economic growth will trend lower as steel-intensive fixed asset investment shifts to more domestic consumption, leading to lower demand growth from Vale and other iron ore producers, and further exacerbating the global glut of the steelmaking ingredient.

Boom Years Are Over
Brazil - Mining Industry Value & Growth

Brazil will also see positive base and precious metals production growth despite a more muted external market. Bauxite and nickel production growth will continue,...

Table of Contents

BMI Industry View
7
SWOT
10
Industry Forecast
11
Bauxite: Growth Despite Market Weakness
11
Foreign Firms To Dominate Industry
11
Risks To Outlook
12
Table: Bauxite Production Forecast (Brazil 2010-2018)
13
Gold: Brazil To See Small Gains
13
Table: Select Greenfield Gold Projects
13
Table: Gold Production Forecast (Brazil 2010-2018)
14
Iron Ore: Growth To Continue Despite Weakening Chinese Demand
15
Vale To Maintain Top Place
15
Risks To Outlook
18
Table: Iron Ore Production Forecast (Brazil 2010-2018)
19
Nickel: Growth To Continue
19
Table: Brazil - Key Nickel Projects
20
Indonesian Restrictions To Encourage Production
20
Table: Nickel Production Forecast (Brazil 2010-2018)
20
Tin: Brazil To Capture Larger Share Of Market
21
Risks To Outlook
22
Table: Tin Production Forecast (Brazil 2010-2018)
22
Industry Risk Reward Ratings
23
Brazil Risk/Reward Ratings
23
Rewards
23
Industry Rewards
23
Country Rewards
23
Risks
24
Industry Risks
24
Country Risks
25
Table: Brazil - Mining Production & Growth
25
Americas Risk/Reward Ratings
25
Significant Rewards For Some, But Risks Abound
25
Weaker Prices To Remain Headwinds
26
Modest Shift In Rankings
27
Table: Americas - Mining Risk/Reward Ratings
28
Regulatory Development
29
Recent Developments
29
Regulatory Uncertainty Ahead
29
Higher Royalties Would Present Challenges, Though Not Game Changer
30
Licensing & Permitting Challenges Pose Ongoing Concern
30
Tax Regime
31
Corruption To Persist
31
Table: Brazil - Political Overview
31
Table: Regional Regulatory Ratings
32
Commodities Forecast
34
Commodity Strategy
34
Ferrous Metals:
34
Steel: Prices To Remain Subdued
36
Non-Ferrous Metals:
37
Aluminium: Price Strength To Continue In Q314
37
Copper: Further Decline By Year's End
38
Lead: Constructive Price Outlook
39
Nickel: Moderation To Continue
40
Tin: Upside Ahead
41
Zinc: Consolidation Before Multi-Year Gains
43
Table: Select Commodities - Performance & BMI Forecasts
45
Competitive Landscape
46
Table: Financial Data For Key Firms Listed In Brazil
46
Foreign Firms Stay Away From Iron Ore
47
Golden Opportunities Hit By Lower Prices
47
Company Profile
48
Alcoa
48
Company Strategy
50
Latest Results
51
Table: Alcoa - Supply Chain Analysis
52
Company Details
53
Anglo American
53
Company Strategy
56
Latest Results
57
Table: Anglo American - Financial Data
58
Vale
59
Company Overview
61
Company Strategy
62
Latest Results
63
Table: Vale - Supply Chain Analysis
64
Table: Vale - Key Financial Data
64
Company Details
65
Regional Overview
66
Mexico & Peru To Remain Top Destinations
66
Canada To Lead North American Mining
68
Frontier Markets To See Little Development
70
71
Table: Estimated 2014 Production For Top Argentine Mines
72
Chinese Investment To Continue
72
Global Industry Overview
74
Capex Cutbacks To Yield Rewards
74
M&A Activity To Pick Up
76
High Grade Opportunities In Iron Ore
76
Shifting Centre Of Growth For Platinum
77
Chinese & Indian Outbound Mineral Investment To Gather Pace
78
Shake-Up For Global Rare Earths Industry
79
Methodology
81
Industry Forecast Methodology
81
Sources
82
Risk/Reward Rating Methodology
83
Table: Weighting Of Indicators
84

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

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.

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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