(MENAFNEditorial)
Chinese mining consolidation will continue over the coming quarters due to weak global minerals prices and government supporting consolidation.
We expect China's mining sector to become increasingly consolidated in the coming quarters for the following reasons.
* First weak mineral prices will price-out high-cost producers. We believe weak mineral prices will continue to pressure Chinese high-cost producing miners over the coming quarters. While state-owned firms are generally more insulated from the weakness in commodity prices the economic slowdown in China will diminish the financial resources of these firms forcing them to cut-back capital expenditures over the coming quarters.
* Second government-supported industry consolidation. Beijing's pledge to instil more supply discipline in heavy industry will reduce the number of miners operating within the country. For instance China's target is to eliminate 97.2mnt of coal over the next five years through the closure of 2791 small coal mines. Similarly Chinese policy makers are attempting to tame excess production in the steel sector through a series of forced closures and consolidation.
* Third stricter governmental environmental regulations. The government's attempt to curb pollution will put pressure on small-scale low grade ore miners operating within China.
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While cooling Chinese economic growth will adversely impact mining operations we expect the impact to vary across different mineral segments. Lead and tin mining production growth will decline less strongly than iron ore and copper due to continued albeit moderate demand growth for these metals. We expect iron ore and copper production growth will decline significantly due to their heavy usage in the construction industry.
Overseas Mining To Continue Despite Economic Slowdown
Depleting reserves falling ore grades and the relatively short life span...
The China 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 China 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 China.
Key Benefits
* Use BMI's independent industry forecasts on China to test other views - a key input for successful budgeting and planning in this mining market.
* Target business opportunities and risks in China's mining sector through our reviews of latest mining industry trends regulatory changes and major deals projects and investments in China.
* 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.
Coverage
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.
Industry SWOT analysis
Analysis of the major Strengths Weaknesses Opportunities and Threats within the mining sector and within the broader political economic and business environment.
BMI Industry Forecasts
Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators supported by explicit assumptions plus analysis of key risks to the main forecasts. Indicators include:
* Mining industry: Industry size (USDmn) real growth (%) % of GDP employment (‘000) workforce as % of total workforce average wage (USD).
* 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 (USDmn) for all major metals minerals ores and gems mined in each state.
* Commodity markets: Global demand supply stocks and benchmark prices (USD) for aluminium copper lead nickel tin zinc gold and steel.
BMI’s Mining Risk Reward Index
BMI’s Risk Reward Indices provide investors (mining companies and support service providers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry economic and demographic data points to provide indices of highest to lowest appeal to investors with each position explained.
Competitive Landscape Tables & Analysis
Comparative company analyses and tables detailing USD sales % share of total sales number of employees year established market cap/NAV ownership structure production and % market share.
Key Projects
Details and analysis of all current and planned developments (new ventures capacity expansion and other investments) across the sector broken down by metal/ore.
Company Profiles*
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.
Sources
The Mining reports are based on an extensive network of primary sources such as multilateral organisations (UN WB IMF) national chambers of commerce and industry national statistical offices government ministries and central banks and multinational companies.
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