Brazil Mining Report Q1 2013
Business Monitor International, January 2013, Pages: 86
Brazil's mining sector is poised for continued, though slower, growth as weaker foreign demand weighs on Brazilian exports. The country's large untapped reserves and relatively small mining sector relative to regional peers make it a compelling sector growth story and should continue to attract investment despite macroeconomic uncertainty. Iron ore production will continue to be the main driver of mining sector investment, but we expect growth in several base metals, as well as gold, providing opportunities for mining companies and investors. Investments into infrastructure in advance of the 2014 FIFA World Cup and 2016 Olympics will not only help support demand for raw materials, but also enable more efficient transport of mineral resources.
We forecast that Brazil's mining industry will grow 4.0% in 2013 over our year-end 2012 mining sector estimate and expect the industry's value to reach US$69.2bn in 2017, representing 2.3% average per annum growth. However, we note that our 2013 forecast remains slightly below Brazil's 2011 mining industry value, due primarily to lower than average iron ore prices for the year. Given Brazil's status as the second largest iron ore producer in the world, negative price trends for iron ore, which contributes approximately 85% of the country's total mining export value, have an outsized effect on the Brazilian mining sector. Our below consensus view on Chinese economic growth, as well as general weakness in demand growth both from China and the developed world, lead us to forecast modest industry growth.
BMI Industry View 7
Brazil Q1 2013 7
SWOT 9
Mining 9
Global Industry Overview 11
Global Mining Outlook 11
1 Winners & Losers In 2013 11
Table: Recent Tax Increases 12
2 China Slowdown To Weigh On Mining Equities 12
3 Capex At Risk As Prices Head Lower 14
4 Africa To Continue Attracting Chinese Attention 16
5 Changing Global Coal Trade Dynamics 17
Regional Overview 19
Americas Mining Sector Outlook 19
Table: Key Central America And Caribbean Mining Projects 21
Market Overview 25
Brazil Market Overview 25
Iron Ore To Remain Foundation Of Brazilian Mining 26
Sector Diversification On The Way 26
Vale To Lead Sector 27
Risks To Outlook 28
Table: Brazil - Mining Industry Value & Production, 2009 - 2017 28
Industry Forecast 30
Bauxite: Growth Despite Market Weakness 30
Major Bauxite Players 31
Table: Table: Brazil - Mine Bauxite Mine Expansion Plans 31
Uncertainty In Indonesia Presents Upside Risks 33
Table: Table: Brazil - Bauxite Production Forecasts, 2009 - 2017 (mnt) 33
Gold: Brazil To Make Gains 34
Table: Select Greenfield Gold Projects 34
Positive Gold Outlook 35
Table: Brazil Gold Production, 2009 - 2017 35
Iron Ore: Growth To Continue Despite Weakening Chinese Demand 36
Slowing Demand From China 37
Vale To Continue Leading The Way 38
Table: Brazil - Key Iron Ore Mining Investments 39
Risks To Outlook 39
Table: Brazil - Iron Ore Production, 2009 - 2017 (mn tonnes, unless stated otherwise) 40
Nickel: Strong Growth To Continue 40
Table: Brazil - Key Nickel Projects 41
Indonesian Upside 42
Table: Brazil - Nickel Production, 2009 - 2017 ('000 tonnes, unless stated otherwise) 43
Tin: Brazil To Capture Larger Share Of Market 43
Table: Brazil - Tin Production Forecasts, 2009 - 2017 ('000 tonnes, unless stated otherwise) 44
Regulatory Development 45
Brazil Mining Sector 45
Brazil's Taxes To Maintain Regional Competitiveness 45
Provinces Seeking Higher Taxes 45
Permitting Challenges Remain 45
Industry Risk Reward Ratings 47
Americas Business Environment Ratings 47
Table: Table: Americas Mining Risk/Reward Ratings 48
Competitive Landscape 51
Brazil Competitive Landscape 51
Table: Financial Data For Key Firms Listed In Brazil 51
Iron Ore Companies Dominate Mining Sector 52
Gold Holds Potential 53
Company Profile 54
Alcoa 54
Table: Table: Alcoa - Financial Data 58
Anglo American 59
Table: Table: Anglo American - Key Financial Data 62
Vale 63
Table: Vale - Key Financial Data 66
Commodities Forecast 68
Monthly Metals Strategy 68
Iron Ore: Holding Up, For Now 69
Steel: Bleak Outlook 71
Aluminium: Major Gains Over 72
Copper: Global Stockpiles Pose Downside Risk 73
Lead: Heading Lower 75
Nickel: No Return To 2012 Highs 77
Tin: Continued Outperformance 78
Zinc: Bounce Is Coming To An End 79
Table: BMI Commodity Price Strategy 80
Table: Select Commodities: Performance & BMI Forecasts 80
Demographic Forecast 81
Brazil Demographic Data 81
Table: Brazil's Population By Age Group, 1990-2020 ('000) 82
Table: Brazil's Population By Age Group, 1990-2020 (% of total) 83
Table: Brazil's Key Population Ratios, 1990-2020 84
Table: Brazil's Rural And Urban Population, 1990-2020 84
Methodology 85
Company Profile
Alcoa
Anglo American
Vale
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