BMI View : The looming exit of Glencore Xstrata's stake in the US$5.9bn Tampakan copper-gold project reinforces our conviction that mining investment in the Philippines will become less attractive amidst the downturn in commodity prices over the coming years. Despite rice mineral deposits in the country , resource nationalism will remain an issue a s the Philippine government looks to implement more onerous regulatory reforms in the mining s pace.
We believe the retreat of commodity prices and fading attraction of frontier mining will continue to dampen capital flows into the Philippines' mining space over the coming years. As spotlighted by the pending exit of Glencore Xstrata from the USD5.9bn Tampakan project in South Cotabato, the country is unlikely to experience a mining boom anytime soon. In January 2014, Glencore Xstrata announced its decision to sell its stake in the mine in a bid to prune its portfolio and focus on the development of brownfield projects. The Tampakan project, with an estimated 15mn tonnes (mnt) of copper and 18mn ounces (moz) of gold, would be the single largest foreign direct investment in the country. To be sure, investment in exploration and mining projects in the Philippines between 2004 and 2012 reached US$5.8bn, according to the Mines and Geosciences Bureau.
Table: Philippines - Number Of Operating Metallic Mines
| || 2009 || 2010 || 2011 || * 2012 |
| Copper || 4 || 4 || 4 || 5 |
| Gold || 8 || 8 || 5 || 6 |
| Metallurgical Chromite || 1 || 1 || 2 || 3 |
| Nickel || 10 || 15 || 18 || 22 |
| Iron || 0 || 0 || 1 || 2 |
| Total Operating Metallic Mines || 23 || 28 || 30 || 38 |
| Source: Mines and Geosciences Bureau. Note: *Based on preliminary data. |
In our view, rich mineral deposits in the Philippines will fail to attract significant mining investment over our forecast period to 2018. In a continuation of the trend seen in 2013, mining companies will struggle to maintain a deep...
The Philippines 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 Philippines 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 Philippines.
- Use BMI's independent industry forecasts on Philippines to test other views - a key input for successful budgeting and planning in this mining market.
- Target business opportunities and risks in Philippines's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in Philippines.
- 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.
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.
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.
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.