2013-09-20 09:09:40 - Fast Market Research recommends "Chile Mining Report Q4 2013" from Business Monitor International, now available
We forecast Chile's mining sector will grow through 2017, albeit at a more moderate pace than in previous years. Major miners will continue to develop several large projects, though rising costs and falling prices will lead to more conservative expansion and acquisition plans. Our forecast is for Chile's mining sector to expand by 1.5% on average per annum through 2017.
The Chilean mining sector will continue to rely on copper production for the foreseeable future. The pipeline of copper projects and the country's global dominance in copper production will ensure the country's dominance despite falling ore grades and more modest production growth. With future supply looking relatively robust and Chinese fixed asset investment slowing, we forecast falling demand growth and hence
lower prices. Indeed, we see prices averaging US$6,800/tonne in 2014, which will heavily affect the Chilean economy. Despite weakness in 2013, copper prices remain elevated by historical standards, encouraging production for the time being.
Full Report Details at
Precious Metals Key To Growth
Chile's mining sector will grow in part thanks to investment in gold mining, diversifying the sector away from copper. We forecast Chile's gold output will grow by an annual average rate of 3.1%, reaching 1.82moz (mn ounces) by 2017. Gold's share of Chile's mining exports in US dollar terms rose from 1.4% in 2007 to 3.5% in 2012. Though we recently downgraded our gold price forecasts as prices continue to weaken, various projects remain in the development stage. Major companies, including Barrick Gold and Goldcorp, are developing large gold projects, although rising costs have seen several mines delayed.
Barrick Gold, Codelco and Antofagasta have all reported rising labour, energy and water costs forcing the companies to increase pre-production expenditure estimates on mine projects. These factors, in addition to falling prices, are leading some firms to question investment and expansion, which presents a downside risk to our forecasts.
Both Large & Mid-tier Key Players
Chile's mining sector will remain dominated by state-owned copper miner Codelco. That said, other large global diversified miners, such as Xstrata and Anglo American, are developing and investing heavily in mine projects in Chile. The rest of Chile's mining sector is made up of mid-sized miners that specialise in the production of a single mineral, such as copper or gold. London headquartered Antofagasta is a growing copper producer that is expected to continue ramping up production at one of its flagship mines through the end of 2013.
We expect the precious metals sectors to diversify as both global gold miners and junior resource companies vie for position. Junior silver miners, such as Genesis Minerals and Laguna Resources, are in the process of developing mineral deposits. Gold and copper production is likely to remain consolidated though, with the largest companies continuing to dominate output and exploration.
Partial Table of Contents:
BMI Industry View
- Sector Growth To Slow On Lower Prices
- Precious Metals Key To Growth
- Both Large & Mid-tier Key Players
- Chile - Q4 2013
- Copper: Modest Growth As Projects Face Delays
- Higher Electricity, Water, & Labour Costs To Weigh On Producers
- Table: Chile - Major Copper Investment Projects
- Table: Chile - Copper Production & Growth ('000 tonnes, unless stated otherwise)
- Silver: After Declines, Moderate Growth Ahead
- Table: Chile - Key Silver Mine Projects
- Table: Chile - Silver Production
- Gold: Diversification Opportunity, But Risks Remain
- Diversification Opportunities For Wider Economy
- Table: Chile - Major Gold Projects
- Risks To Gold Sector Remain Elevated
- Table: Chile - Gold Production & Growth
Industry Risk Reward Ratings
- Americas - Q4 2013
- Public Opposition And Government Pressures
- Chile: Increasing Vulnerability To Copper Downturn
- Canada: Continued Developed Country Mining Destination
- United States: Permitting Issues Limit Growth Potential
- Peru: Protests Will Keep Pressure On Miners And Government
- Brazil: Higher Royalties Imminent
- Table: Americas Mining Risk/Reward Ratings
- Mexico: Domestic Fundamentals Favourable To Miners
- Argentina: Clear Potential Amid High Risks
- Central America: Frontier Market Opportunities?
- Market Opportunities Remain But Slower Growth Ahead
- Copper Dominates Mining Industry
- Lower Precious Metals Prices May Cause Project Delays
- Positive Business Environment To Remain
- Risks To Outlook
- Table: Chile - Mining Industry Value & Production Forecasts
- Favourable Regulatory Environment To Persist
- Government Policies Favour Investment
- ...But Some Cracks Showing
- Tax Regime Remains Simple
- Corruption Low Compared To Peers
- Table: Chile - Political Overview
- Commodity Strategy
- Non-Ferrous Metals
- Aluminium: Weakness Ahead After Recent Surge
- Copper: Bounce To Give Way
- Nickel: Underperformance To Continue
- Zinc: Weak Steel Sector To Weigh On Zinc
- Table: Select Commodities - Performance & BMI Forecasts
- Table: BMI Commodities Strategy
Full Table of Contents is available at:
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