2013-02-19 10:07:24 - New Materials market report from Business Monitor International: "Brazil Mining Report Q1 2013"

Brazil Q1 2013

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.


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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.

We also highlight two potential upsides to our outlook. Firstly, continued policy uncertainty in Indonesia may help boost exports of Brazilian nickel, bauxite, and tin. Indonesia's central government foray into resource nationalism led to uneven export volumes throughout the year, reflecting a declining business environment for mining firms. Though exports largely resumed in Q4 2012, further intervention by the central government may impede export growth. Secondly, we also highlight our positive outlook for Brazilian gold. Though Brazil's gold output is ranked 13th in the world, continued investment into the sector by many junior firms should increase gold's contribution to Brazil's mining industry value. Given our forecast for elevated gold prices and Brazil's generally favourable business environment, we expect investment into gold exploration and mining to pick up in the coming years.

Partial Table of Contents:

BMI Industry View
- Brazil Q1 2013
SWOT
- Mining
Global Industry Overview
- Global Mining Outlook
- 1. Winners & Losers In 2013
- Table: Recent Tax Increases
- 2. China Slowdown To Weigh On Mining Equities
- 3. Capex At Risk As Prices Head Lower
- 4. Africa To Continue Attracting Chinese Attention
- 5. Changing Global Coal Trade Dynamics
Regional Overview
- Americas Mining Sector Outlook
- Table: Key Central America And Caribbean Mining Projects
Market Overview
- Brazil Market Overview
- Iron Ore To Remain Foundation Of Brazilian Mining
- Sector Diversification On The Way
- Vale To Lead Sector
- Risks To Outlook
- Table: Brazil - Mining Industry Value & Production, 2009 - 2017
Industry Forecast
- Bauxite: Growth Despite Market Weakness
- Major Bauxite Players
- Table: Table: Brazil - Mine Bauxite Mine Expansion Plans
- Uncertainty In Indonesia Presents Upside Risks
- Table: Table: Brazil - Bauxite Production Forecasts, 2009 - 2017 (mnt)
- Gold: Brazil To Make Gains
- Table: Select Greenfield Gold Projects
- Positive Gold Outlook
- Table: Brazil Gold Production, 2009 - 2017
- Iron Ore: Growth To Continue Despite Weakening Chinese Demand
- Slowing Demand From China
- Vale To Continue Leading The Way
- Table: Brazil - Key Iron Ore Mining Investments
- Risks To Outlook
- Table: Brazil - Iron Ore Production, 2009 - 2017 (mn tonnes, unless stated otherwise)
- Nickel: Strong Growth To Continue
- Table: Brazil - Key Nickel Projects
- Indonesian Upside
- Table: Brazil - Nickel Production, 2009 - 2017 ('000 tonnes, unless stated otherwise)
- Tin: Brazil To Capture Larger Share Of Market
- Table: Brazil - Tin Production Forecasts, 2009 - 2017 ('000 tonnes, unless stated otherwise)
Regulatory Development
- Brazil Mining Sector
- Brazil's Taxes To Maintain Regional Competitiveness
- Provinces Seeking Higher Taxes
- Permitting Challenges Remain
Industry Risk Reward Ratings
- Americas Business Environment Ratings
- Table: Table: Americas Mining Risk/Reward Ratings
Competitive Landscape
- Brazil Competitive Landscape
- Table: Financial Data For Key Firms Listed In Brazil
- Iron Ore Companies Dominate Mining Sector
- Gold Holds Potential
Company Profile
- Alcoa
- Table: Table: Alcoa - Financial Data
- Anglo American
- Table: Table: Anglo American - Key Financial Data
- Vale
- Table: Vale - Key Financial Data
Commodities Forecast
- Monthly Metals Strategy
- Iron Ore: Holding Up, For Now
- Steel: Bleak Outlook
- Aluminium: Major Gains Over
- Copper: Global Stockpiles Pose Downside Risk
- Lead: Heading Lower
- Nickel: No Return To 2012 Highs
- Tin: Continued Outperformance
- Zinc: Bounce Is Coming To An End
- Table: BMI Commodity Price Strategy
- Table: Select Commodities: Performance & BMI Forecasts
Demographic Forecast
- Brazil Demographic Data
- Table: Brazil's Population By Age Group, 1990-2020 ('000)
- Table: Brazil's Population By Age Group, 1990-2020 (% of total)
- Table: Brazil's Key Population Ratios, 1990-2020
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