Frontier mining investment will remain a key trend in the coming years, despite the recent headwinds in commodity markets. Investors will continue to be attracted by elevated commodity prices, high-grade reserves and sustained improvements in business environment throughout much of the emerging world. Whilst capital expenditure plans in some countries will be reduced or cancelled on the back of lower mineral prices, we highlight several bright spots where the mining sector is set to undergo rapid growth.
| Capex To Drop Off On Lower Prices |
|Mining Capital Expenditure & S&P GSCI Industrial Metals Index|
In this report, w e highlight rapid future growth in mining sectors across Central America, West and Southern Africa and South East Asia . I nvestors will be attracted by the regions' high -grade resources that are still attractive economically despite a weaker outlook for metal prices. As well as countries that are seeing significant mining investment for the first time , we also highlight some mature markets where we see significant potential. The frontier regions of China, Canada and Scandinavia have significant deposits and good business environment s which will attract investment given elevated metal prices. Development of mining in these areas will have a transformative effect on the economies of host countries, as well as create significant demand for mine service expertise.
After assessing the major growth opportunities for frontier mining investment we highlight risks to the development of these sectors. Most notably, many frontier countries have poor infrastructure capacity, lacking in adequate roads, railways, power and water supplies. Given creaking infrastructure pre-mining development, there will need to be substantial investment in these areas if the frontier mining boom is to be unhindered. In addition, we expect the trend of resource nationalism to continue as governments seek to tap their fast growing mining sectors for additional...