Business Monitor International


West Africa Mining Report

Published 13 May 2014

  • 104 pages
 
$1,295.00
West Africa Mining Report

BMI View: We expect West Africa's mining sector to undergo rapid growth as companies are attracted to the region's sizeable mineral deposits. Iron ore will be the centre of this transformation as abundant high-grade reserves in Guinea, Sierra Leone, Liberia and Cote d'Ivoire offer unrivalled opportunities. However, risks to this bullish outlook remain weighted to the downside, with weak global iron ore prices, insufficient infrastructure and political concerns top of the list.

West Africa will exhibit some of the fastest rates of growth in iron ore production over the coming years which will make the region a major export hub by 2018. We expect steady growth in gold production in Ghana, Côte d'Ivoire, Mali and Burkina Faso, however we highlight that weak gold prices will squeeze margins for gold miners and precipitate mine closures where cash costs become unsustainable.

West African Boom
Select Countries - Iron Ore Production (mnt)

The key risks to our positive outlook are primarily the region's perennially weak infrastructure, as power supplies, road and rail routes are struggling with current demands, let alone the rapid growth we forecast. Secondly, political risk remains elevated in West African countries as years of instability and political stalemate have taken a heavy toll on business environments in the region. Mining code reviews and potentially damaging regulatory developments have the potential to deter investment. Finally, weak iron ore prices constitute a further risk to future investment. We forecast iron ore prices to average US$101/tonne over the period 2014-2018, significantly lower than their 2011 average of US$176/tonne.

Table of Contents

BMI Industry View
7
SWOT
9
Industry Forecast
10
Guinea Iron Ore: Pushing Back The Boom
10
Potential For Chinese Investment In Infrastructure
11
Elevated Political Risk
12
Table: Guinea - Main Iron Ore Projects
13
Table: Guinea - Iron Ore Production (million tonnes)
13
Guinea Bauxite: Fourth-Largest Producer By 2018
14
Table: Guinea - Key Expansion Plans
16
Political Risk & Poor Infrastructure To Weigh On Investment
17
Table: Guinea - Bauxite Production (million tonnes)
18
Sierra Leone Iron Ore: Export Boom
18
Table: Sierra Leone - Main Iron Ore Projects
21
Table: Sierra Leone - Iron Ore Production (million tonnes)
22
Mauritania: Mining Sector To Receive Boost, But Overshadowed By Neighbours
22
Table: Mauritania - Key Mining Projects
25
Gradual Steps To Improve Infrastructure
25
Table: Mauritania - Iron Ore & Gold Production
25
Mali Gold: Sound Growth Outlook Plagued By Price Weakness
26
Sizeable Downside Risks
27
Government Support
28
Table: Mali - Largest Gold Projects
29
Political Risk Subdued
29
Table: Mali - Gold Production
29
Ghana Gold: Headwinds For Gold Miners
30
Government Measures To Increase Difficulties
32
Table: Ghana - Gold Production (million oz)
33
C-te d'Ivoire Gold: Surge Ahead, But Major Risks Lurk
33
Major Downside Risks Ahead
35
Table: C-te d'Ivoire - Largest Gold Projects
36
Table: C-te d'Ivoire - Gold Production (million ounces)
36
Liberia Iron Ore: Revitalising The Industry
36
Relatively Stable Business Environment
37
Table: Liberia - Main Iron Ore Projects Under Development
38
Downside Risks
38
Table: Liberia Iron Ore Production & Growth
38
Industry Risk Reward Ratings
39
Risk/Reward Ratings
39
Botswana On Top
40
Table: Africa - Mining Risk/Reward Ratings
41
South Africa: Still Ranking Highly
41
Lower Gold Prices Reduce Rewards
42
Risk/Reward Ratings
44
Rewards
44
Industry Rewards
44
Country Rewards
44
Risks
45
Industry Risks
45
Country Risks
45
Table: Guinea - Mine Production & % Growth
46
Regulatory Development
47
Mauritania: Mining Sector To Remain Investor Friendly
47
Ghana: Surprise Plans For A Windfall Tax
47
Mining Reviews For Mali And Sierra Leone
48
Tough Conditions In Guinea
48
Cote d'Ivoire Taking Positive Steps
48
Future Possibility Of Regulation Harmonization
48
Table: Africa - Regulatory Outlook
49
Commodities Forecast
51
Commodity Strategy
51
Iron Ore: Fading Iron Will
51
Steel: Global Glut To Weigh On Prices
53
Aluminium: Fundamentals To Remain Weak
54
Copper: All Eyes On China
55
Lead: Outperforming Its Troubled Peers
56
Nickel: Monthly Outperformer
58
Tin: Outperforming A Weak Field
59
Zinc: Further Consolidation Likely
60
Table: Select Commodities - Performance & BMI Forecasts
62
Competitive Landscape
63
Table: Financial Metrics
64
Company Profile
65
Randgold Resources
65
Table: Randgold Resources - Key Financial Data
68
AngloGold Ashanti
69
Overview
71
Strategy
72
Risks
73
Latest Results
73
Table: AngloGold Ashanti - Key Financial Data
74
Rio Tinto
75
Company Overview
77
Company Strategy
78
Latest Financial Results
79
Table: Rio Tinto - Key Financial Data
80
Regional Overview
81
Mining - Africa Overview
81
Key Opportunities
81
1
81
2
83
3
84
Key Challenges
85
1
85
2
86
3
87
Table: Africa - Key Mining Regulatory Developments
88
Global Industry Overview
90
Challenges
90
Table: Mining - Select M&A Deals
94
Cause For Optimism
97
Methodology
104
Industry Forecast Methodology
104
Sources
105
Risk/Reward Rating Methodology
106
Table: Weighting Of Indicators
108

The West 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 West 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 Cote d`Ivoire, Mauritania, Sierra Leone, Liberia, Mali, Guinea.

Key Benefits

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

Executive Summary

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 Ratings

BMI's Mining Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (mining companies and support service providers) in the regional mining market. The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry Ratings 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-2017 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-2017 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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