2012-10-26 05:43:04 - New Materials research report from Business Monitor International is now available from Fast Market Research
The past decade of stagnation and decline in South Africa's mining sector is set to end as several projects across South Africa's vast mineral wealth come online in the next five years. We expect South Africa's mining sector value will reach US$36.6bn by 2016, from US$33.2bn in 2011.
Stagnation To End, But Global Share To Decline
While South Africa's mining output growth is set to pick up over the coming years, we expect the country's share of global output to continue to decline as other major mining countries see faster rates of growth, most notably China and Australia. In addition, we expect investment, particularly in gold, to be increasingly attracted to low-cost, high resource opportunities in the rest of the continent such
as the DR Congo and Ghana. This scenario is likely to be replicated in the diamond and iron ore sectors as growth elsewhere, mainly Zimbabwe and West Africa, respectively, makes South Africa less attractive for opportunities.
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Coal is the one important exception to this rule. We forecast coal output to reach 349mnt in 2016, marking average growth of 5.4%, one of the fastest rates out of major producers. Because of this growth, we expect South Africa to become a global coal export hub eating into the global share of exports which is currently dominated by Australian and Indonesia, where we expect output growth to slow significantly.
South Africa's mining sector is amenable to investment in the sector with few obstacles confronting foreign investment. The government is generally stable and its business environment is one of the best on the continent. In terms of taxation, the South African government recently proposed increasing taxes on mining companies from 3-5%. We do not expect this measure, if implemented, to deter investment due to the size of the country's mineral wealth and because this tax is relatively small compared with those introduced and suggested in Chile and Australia.
The issue of nationalisation has resurfaced and although we see this as a highly unlikely scenario, it could deter some investment into the mining sector. In addition, the South African government has stated plans to introduce a new environmental tax in an effort to address future eruptions of acid mine drainage. If these proposals are implemented then it could increase costs for the mining companies, which have frequently been accused of environmental degradation.
South Africa's mining sector is dominated by a few foreign mining companies, most notably Anglo American, AngloGold Ashanti and Impala Platinum. We expect South Africa's mining sector to remain consolidated with few new entrants set to commence operations and because existing companies account for most of the largest expansion plans that have been announced. That said, if platinum and palladium prices continue to push higher we expect there to be greater interest in mining in South Africa as there are few economical reserves of platinum group metals outside of South Africa and Russia.
Partial Table of Contents:
- South Africa Mining Sector SWOT
- South Africa Business Environment SWOT
Global Mining Outlook
- Table: Recent Tax Increases
- Table: Largest Coal Projects
- Table: Major Frontier Mining Projects
Africa Mining Outlook
- Table: Recent Government Intervention
Industry Trend Analysis
- Table: South Africa's Main Expansion Plans
- Table: South Africa's Mining Industry Value & Production
- Coal: Dramatic Turnaround On The Horizon
- Table: Major Expansion Projects In South Africa
- Table: South Africa's Coal Production
- Diamonds: Sector To Slowly Return To Former Levels
- Table: South Africa's Largest Diamond Projects
- Table: South Africa's Diamond Production
- Gold: Harmony Gold To Reverse Output Decline
- Table: South Africa's Major Expansion Projects
- Table: South Africa's Gold Production
- Iron Ore: Kumba To Drive Long-Term Growth
- Table: South Africa's Major Iron Ore Projects
- Table: South Africa's Iron Ore Production
- Palladium: Anglo American To Drive Steady Output Growth
- Table: South Africa's Largest Development Projects
- Table: South Africa's Palladium Production
- Platinum: Lonmin To Boost Long-Term Production Growth
- Table: South Africa's Largest Platinum Expansion Plans
- Table: South Africa's Platinum Production
Africa Business Environment Ratings
- Table: African Government Intervention
- Table: Africa's Risk/Rewards Ratings
- Table: Select Companies - Financial Data
- Anglo American
- Table: Anglo American's Key Financial Data
- Impala Platinum
- Table: Impala Platinum's Key Financial Data
- AngloGold Ashanti
- Table: AngloGold Ashanti's Key Financial Data
- Monthly Metals Update
- Steel Prices Have Topped Out
- Copper: Relative Outperformer But Still Weak
- Tin To Outperform
- Aluminium: Substantial Support Around US$1,900/tonne
- Nickel: Oversupply Pushing Prices Lower
- Break Of Support On The Cards For Lead
- Zinc: Downward Trend Continues
- Table: Select Commodities - Performance & BMI Forecasts
Business Environment Ratings Methodology
Full Table of Contents is available at:
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