Mine output growth in Brazil will remain solid, particularly for iron ore, despite weak prices. While we forecast iron ore prices will average lower year-on-year over the coming years, at USD75/tonne in 2015 and USD80/tonne in 2016, Brazilian firm Vale will continue to take advantage of its low unit costs and seek to increase its global market share. Vale cited cash costs around USD23/tonne in Q314, with costs dipping to as low as USD11/tonne for certain mine assets. In the years ahead, we forecast iron ore mine output will grow at an average annual pace of 4.3% to 2018. Shipping times and costs to China are longer and higher compared with Australian iron ore producers though, which may lead to Australian producers capturing a greater share of the Chinese iron ore import market.
We expect Brazil's total mining industry value to see only modest growth averaging 1.2% per annum to 2018 despite solid growth in iron ore output. Ultimately, our bearish iron ore price outlook underpins our modest industry value forecast as iron ore makes up around 85% of the country's total mining export value. We believe Chinese economic growth will trend lower as steel-intensive fixed asset investment shifts to more domestic consumption, leading to lower demand growth from Vale and other iron ore producers, and further exacerbating the global glut of the steelmaking ingredient.
Brazil will also see positive base and precious metals production growth despite a more muted external market. Bauxite and nickel production growth will continue,...
The Brazil 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 Brazil 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 Brazil.
- Use BMI's independent industry forecasts on Brazil to test other views - a key input for successful budgeting and planning in this mining market.
- Target business opportunities and risks in Brazil's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in Brazil.
- 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:
BMI Macroeconomic Forecasts
- 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 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.
Brazil's mining industry value growth to 2018 will not match that of the previous decade due to subdued mineral prices in the years ahead. Still , mine output will expand as both domestic and foreign firms continue to exploit the country's significant reserves of both industrial and precious metals.
BMI Industry ViewSWOTIndustry ForecastBauxite: Growth Despite Market WeaknessForeign Firms To Dominate IndustryRisks To Outlook
Table: Bauxite Production Forecast (Brazil 2010-2018)Gold: Brazil To See Small Gains
Table: Select Greenfield Gold Projects
Table: Gold Production Forecast (Brazil 2010-2018)Iron Ore: Growth To Continue Despite Weakening Chinese DemandVale To Maintain Top PlaceRisks To Outlook
Table: Iron Ore Production Forecast (Brazil 2010-2018)Nickel: Growth To Continue
Table: Brazil - Key Nickel ProjectsIndonesian Restrictions To Encourage Production
Table: Nickel Production Forecast (Brazil 2010-2018)Tin: Brazil To Capture Larger Share Of MarketRisks To Outlook
Table: Tin Production Forecast (Brazil 2010-2018)Industry Risk Reward RatingsBrazil Risk/Reward RatingsRewardsIndustry RewardsCountry RewardsRisksIndustry RisksCountry Risks
Table: Brazil - Mining Production & GrowthAmericas Risk/Reward RatingsSignificant Rewards For Some, But Risks AboundWeaker Prices To Remain HeadwindsModest Shift In Rankings
Table: Americas - Mining Risk/Reward RatingsRegulatory DevelopmentRecent DevelopmentsRegulatory Uncertainty AheadHigher Royalties Would Present Challenges, Though Not Game ChangerLicensing & Permitting Challenges Pose Ongoing ConcernTax RegimeCorruption To Persist
Table: Brazil - Political Overview
Table: Regional Regulatory RatingsCommodities ForecastCommodity StrategyFerrous Metals:Steel: Prices To Remain SubduedNon-Ferrous Metals:Aluminium: Price Strength To Continue In Q314Copper: Further Decline By Year's EndLead: Constructive Price OutlookNickel: Moderation To ContinueTin: Upside AheadZinc: Consolidation Before Multi-Year Gains
Table: Select Commodities - Performance & BMI ForecastsCompetitive Landscape
Table: Financial Data For Key Firms Listed In BrazilForeign Firms Stay Away From Iron OreGolden Opportunities Hit By Lower PricesCompany ProfileAlcoaCompany StrategyLatest Results
Table: Alcoa - Supply Chain AnalysisCompany DetailsAnglo AmericanCompany StrategyLatest Results
Table: Anglo American - Financial DataValeCompany OverviewCompany StrategyLatest Results
Table: Vale - Supply Chain Analysis
Table: Vale - Key Financial DataCompany DetailsRegional OverviewMexico & Peru To Remain Top DestinationsCanada To Lead North American MiningFrontier Markets To See Little Development
Table: Estimated 2014 Production For Top Argentine Mines
Chinese Investment To Continue
Global Industry Overview
Capex Cutbacks To Yield Rewards
M&A Activity To Pick Up
High Grade Opportunities In Iron Ore
Shifting Centre Of Growth For Platinum
Chinese & Indian Outbound Mineral Investment To Gather Pace
Shake-Up For Global Rare Earths Industry
Industry Forecast Methodology
Risk/Reward Rating Methodology
Table: Weighting Of Indicators
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