BMI View: The cooling of the Chinese economy will remove the shine off mining investment in South East Asia . Frontier regions will be the first places where miners pull back their investment as brownfield projects take precedence . Nonetheless, it is certainly not all gloomy in the mining sector. Resilient demand from the power sector will continue to support growth in coal production, while the positive development of the nuclear sector in South Korea fuels uranium mining production.
Despite the rich deposits of untapped minerals on offer, we believe South East Asia's mining sector will struggle to uncover its potential over the coming years. The cooling of Chinese economic growth will remove a crucial pillar of support for mineral prices, particularly industrial metals such as iron ore and copper. For instance, we forecast iron ore prices to average USD101/tonne between 2014 and 2018, significantly lower than the average price of USD135/tonne in 2013. The outlook for gold mining is similarly precarious. We believe the bull run in gold prices is over and expect prices to average USD1,170/oz between 2014 and 2018. This represents a 30% fall in prices compared with the average price of USD1,669/oz in 2012.
| Less Shiny |
|Select Prices - Iron Ore (USD/tonne) & Gold (USD/oz)|
We expect miners across the board to come under pressure from the squeeze in profit margins and rising demand for shareholders' returns. Crucially, frontier regions will be the first places where miners pull back their investment as brownfield projects take precedence. Many frontier markets in South East Asia are beset by a spate of challenges. These include the lack of infrastructure support, poor power supply, immature regulatory framework to the periodic bouts of political unrest in countries such as Thailand and Cambodia.
| Hit By China Slowdown |
|Select Countries - Mining Industry Value, USDbn (% chg y-o-y)|
The South East Asia 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 East Asia 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 Thailand, South Korea, Myanmar, Vietnam.
- Use BMI's independent industry forecasts on Thailand, South Korea, Myanmar, Vietnam to test other views - a key input for successful budgeting and planning in this mining market.
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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.