Business Monitor International


Malaysia Mining Report

Published 29 April 2014

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Malaysia Mining Report

BMI View: Despite significant deposits of untapped minerals and positive reforms by the Malaysian government in recent years, Malaysia's mining sector is unlikely to witness a resource boom over our forecast period to 2018. Depleting reserves and falling ore grades will continue to impede growth in the tin sector, while falling gold prices remove the shine off investment in the gold mining industry.

We forecast Malaysia's mining industry to reach USD41.2bn by 2018, increasing at a clip of 5.0% per annum. Despite significant deposits of untapped minerals and positive reforms by the Malaysian government in recent years, a resource boom is unlikely to catch up with the country anytime soon. In contrast to the relentless pursuit of volume growth over the past decade, mining firms are focusing on the development of their core brownfield assets on the back of the economic slowdown in China. As mineral prices continue to trend lower over the coming quarters, this should put a lid on capital flows into Malaysia's mining space.

Resource Boom Far Away
Malaysia - Mining Industry Value

In our view, Malaysia's tin mining sector is unlikely to stage a comeback anytime soon. Depleting reserves and falling ore grades will continue to take their toll on production and we forecast tin output to increase at an average rate of 0.5% per annum between 2014 and 2018. Rahman Hydraulic Tin (RHT) will continue to dominate the sector with its largest open-pit tin mine in Malaysia. The miner enjoys significant economies of scale compared with other small, artisanal domestic mines.

Hard Digging
Malaysia - Select Minerals Production (% chg y-o-y)

We believe the outlook in the gold sector is equally dull. Falling gold prices will deter investors from undertaking new mining investment while weakening margins threaten the financial viability of existing projects. Nonetheless, we do expect a collapse in gold mine production over our forecast period to 2018. Major gold miner Monument Mining...

Table of Contents

BMI Industry View
7
SWOT
9
Industry Forecast
10
Gold: Not As Golden
10
Table: Malaysia - Select Gold Mining Projects
12
Table: Malaysia - Gold Mine Production Forecast
15
Tin: No Comeback In Sight
15
Table: Malaysia - Tin Mine Forecast
17
Industry Risk Reward Ratings
18
Risk/Reward Ratings
18
Rewards
18
Industry Rewards
18
Country Rewards
18
Risks
18
Industry Risks
18
Country Risks
19
Table: Malaysia - Mining Industry Value & Production Forecasts
19
Regulatory Development
20
Key Details
20
State Mineral Enactment A Boon For Miners
21
Table: Breakdown Of Mining Licence
21
Table: Breakdown Of Prospecting & Exploration Licence
21
Tax Regime
21
Corruption Remains A Key Concern
22
Table: Asia - Mining Regulatory Scorecard
22
Table: Malaysia - Political Overview
23
Commodities Forecast
25
Commodity Strategy
25
Iron Ore: Fading Iron Will
25
Steel: Global Glut To Weigh On Prices
27
Aluminium: Fundamentals To Remain Weak
28
Copper: All Eyes On China
29
Lead: Outperforming Its Troubled Peers
30
Nickel: Monthly Outperformer
32
Tin: Outperforming A Weak Field
33
Zinc: Further Consolidation Likely
34
Table: Select Commodities - Performance & BMI Forecasts
36
Competitive Landscape
37
Company Profile
39
Malaysia Smelting Corporation Berhad
39
Table: MSC - Key Financial Data
41
Monument Mining
42
Table: Monument Mining - Key Financial Data
44
Regional Overview
46
Asia - Q3 2014
46
Challenges
46
Opportunities
49
Global Industry Overview
54
Challenges
54
Table: Mining - Select M&A Deals
58
Cause For Optimism
61
Methodology
68
Industry Forecast Methodology
68
Sources
69
Risk/Reward Rating Methodology
70
Table: Mining Risk/Reward Ratings Indicators
72
Table: Weighting Of Indicators
73

The Malaysia 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 Malaysia 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 Malaysia.

Key Benefits

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