Business Monitor International


South Africa Mining Report

Published 06 October 2014

  • 98 pages
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  • Includes 3 free updated quarterly reports
 
$1,295.00
South Africa Mining Report

BMI View:   The past decade of minimal growth in South Africa's mining sector is set to continue as the country's gold and platinum sectors face diminishing margins and industrial strife. The coal and iron ore sectors will come under pressure as particularly weak prices dent production growth. We expect South Africa's mining industry value to grow at an annual average rate of 0.8% between 2014 and 2018, from USD32. 6bn in 2014 to USD33. 7 bn in 2018.

South Africa's share of global mined output is set to decline as other mining jurisdictions experience faster rates of growth. We expect investment, particularly in gold mining, to be more attracted to low-cost, high resource opportunities in the rest of the continent such as the Democratic Republic of Congo.

South Africa's mining sector is amenable to investment, with few obstacles confronting foreign companies wishing to enter. The government is generally stable and South Africa's business environment is one of the best on the continent.

In Q114, Parliament's ratification of the long-awaited amendments to the Mineral and Petroleum Resources Development Act turned out to be a net positive for the mining sector. Although the new law will allow the government greater powers in the mining sector and will bolster South Africa's beneficiation drive, the removal of uncertainty around these issues was a crucial undertaking. Mining companies responded positively, grateful for their consultation in the decision-making process. Moreover, the changes which were finally implemented had been greatly modified from original proposals. 

A carbon tax, which had initially been proposed for implementation in 2015, has now been pushed back to 2016 at the earliest. This development provides welcome news for coal miners in the country.

Lacklustre Growth
South Africa - Select Mineral Production % Growth y-o-y

Industrial unrest will continue to be a major challenge. The precedent set by Lonmin offering a 22% pay rise for workers...

Table of Contents

BMI Industry View
7
SWOT
9
Industry Forecast
11
Coal: Waning Investor Interest
11
Strike Action To Remain A Risk
12
Chinese Curbs Present A New Concern
13
Some Important Bright Spots Remain
14
Table: South Africa - Major Coal Projects & Expansions
15
Indian Investment Ahead
16
Carbon Tax Postponed
17
Positive Infrastructure Developments
17
Currency Depreciation To Support Operations
18
Table: Coal Production Forecast (South Africa 2010-2018)
19
Diamonds: Exceptional Discoveries Bolster Outlook
19
Stellar Discoveries Bolster Outlook
21
Downside Risks
21
Table: South Africa - Largest Diamond Projects
21
Table: Diamond Production (South Africa 2010-2018)
22
Gold: Sector Buffeted By Weak Prices
22
Potential Upside-
25
Table: Gold Production Forecast (South Africa 2010-2018)
25
Iron Ore: Global Price Collapse To Squeeze Margins
26
Table: South Africa - Major New Iron Ore Projects & Expansions
28
Risks Lurking On The Horizon
29
Table: Iron Ore Production Forecast (South Africa 2010-2018)
29
Platinum: Divestments Ahead
29
Wage Costs Will Continue Rising
30
Mine Depletion & Power Constraints To Further Raise Costs
32
Diminishing Revenue To Drive Divestment
33
Table: South Africa - Platinum Mine Production & Growth
34
Palladium: Output To Stagnate
35
Table: South Africa - Largest Palladium/Platinum Development Projects
37
Table: Palladium Production (South Africa 2010-2018)
37
Industry Risk Reward Ratings
38
Africa Risk/Reward Ratings
38
Large Rewards On Offer - With Varying Degrees Of Risk
38
Gold Producers Lag The Pack
39
Largest Quarterly Change In South Africa
40
Table: Africa - Mining Risk/Reward Ratings
41
South Africa Risk/Reward Ratings
42
Rewards
42
Industry Rewards
42
Country Rewards
42
Risks
43
Industry Risks
43
Country Risks
43
Table: South Africa - Major Mining Expansion Plans
44
Table: Mining Industry Forecasts (South Africa 2010-2018)
44
Regulatory Development
46
Table: Africa - Mining Regulatory Outlook
46
Table: South Africa Political Overview
49
Commodities Forecast
52
Commodity Strategy
52
Ferrous Metals:
52
Steel: Prices To Remain Subdued
54
Non-Ferrous Metals:
55
Aluminium: Price Strength To Continue In Q314
55
Copper: Further Decline By Year's End
56
Lead: Constructive Price Outlook
57
Nickel: Moderation To Continue
58
Tin: Upside Ahead
59
Zinc: Consolidation Before Multi-Year Gains
61
Table: Select Commodities - Performance & BMI Forecasts
62
Competitive Landscape
64
Table: South Africa - Largest Mining Companies' Financial Data
65
Company Profile
67
Impala Platinum
67
Table: Impala Platinum - Key Financial Data
69
Anglo American
71
Company Strategy
74
Latest Results
75
Table: Anglo American - Financial Data
76
AngloGold Ashanti
78
Overview
80
Strategy
81
Risks
82
Latest Results
82
Table: AngloGold Ashanti - Key Financial Data
83
Regional Overview
84
Chinese Quest For Minerals Undeterred
84
Table: Select Projects - Chinese Mining Investment In Africa
84
Look To West Africa For Rapid Growth
85
Tin Mining To Make A Comeback
86
Flurry Of Investment Into Southern African Coal
87
Changing Landscape For Precious Metals
88
Risks & Opportunities In Infrastructure
90
Global Industry Overview
92
Capex Cutbacks To Yield Rewards
92
M&A Activity To Pick Up
94
High Grade Opportunities In Iron Ore
94
Shifting Centre Of Growth For Platinum
95
Chinese & Indian Outbound Mineral Investment To Gather Pace
96
Shake-Up For Global Rare Earths Industry
97
Methodology
99
Industry Forecast Methodology
99
Sources
100
Risk/Reward Rating Methodology
101
Table: Weighting Of Indicators
103

The South Africa 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 South Africa 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 South Africa.

Key Benefits

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