China Mining Report

 Published On: May, 2016 |    No of Pages: 120 |  Published By: BMI Mining | Format: PDF
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BMI View: China's mining sector will continue to be pressurised by low mineral prices over the coming years. Government-led consolidation will support production growth by state-owned enterprises as smaller miners shut operations, however, depleting reserves, falling ore grades and the relatively short life span of domestic mines will further drive outward Chinese investment.

Latest Updates & Structural Trends
■ While cooling Chinese economic growth will adversely impact mining operations, we expect the impact to vary across different mineral segments. Copper and tin will do better due to the better price outlook for these minerals than iron ore and coal.
■ China's structural shortfall in domestic production combined with the government's desire for resource security will continue to spur overseas mining deals. Although China's reliance on imports will increase due to the country's depleting reserves, falling ore grades and the relatively short life span of mines, outbound investment will face more caution, as Chinese projects are increasingly faced with rising costs and project delays. As a result, Chinese firms' 2015 mining merger and acquisition activity (M&A) in Latin America slowed to USD2.1bn, a 72.8% y-o-y decrease from 2014. Chinese mining M&A activity in the Middle East and Africa also fell significantly, by 46.0% y-o-y, to USD135mn in 2015. Chinese metal investment in Sub Saharan Africa also dropped in 2015 to USD1.2bn, significantly lower than USD4.0bn in 2014 and USD8.4bn in 2013.

BMI Industry View ... 7
Table: China Mining Industry Value . . 7
Latest Updates & Structural Trends . 7
Table: China - Mineral Round Up . . . . . 8
SWOT .... 10
Industry Forecast .. 12
China - 13th Five-Year Plan Signals Further Mining Consolidation ... 12
Bauxite: Imports To Remain Strong . 17
Latest Developments . 17
Table: Bauxite Production Forecast (China 2012-2020) . . . . . 17
Structural Trends ..... 17
Imports: Growth In Short Term And Long Term . 18
Risks To Production Outlook ........ 20
Coal: Government Consolidation To Hamper Growth ... 20
Latest Developments . 20
Table: Coal Production Forecasts . . . . 20
Table: China - Select Coal Mining Projects 21
Structural Trends ..... 22
Copper: Slow Growth Ahead  29
Latest Developments . 29
Table: Copper Production Forecast (China 2012-2020) . . . . . 29
Table: China - Select Copper Projects . . . . . 30
Structural Trends ..... 32
Gold: Overseas Investment To Remain Strong ..... 35
Table: Gold Production Forecast (China 2012-2020) . 35
Table: China - Overseas Gold Mining Deals . . . . . 41
Iron Ore: Output To Decline, Imports To Slow .... 42
Latest Developments . 42
Table: China Iron Ore Production Forecast . . . . . 42
Table: China Iron Ore Projects . 43
Structural Trends ..... 44
Price Weakness To Hurt Miners .... 44
Small-Scale Miners To Come Under The Most Pressure ........ 45
Strict Regulations To Increase Import Preference ........ 46
Nickel: Weak Ore Production And Imports, Strong Refined Imports ... 48
Latest Developments . 48
Table: Nickel Production Forecast (China 2012-2020) 48
Table: China - Select Nickel Projects . 49
Structural Trends ..... 49
Further Consolidation ........ 51
Risks To Outlook ...... 51
Tin: Yunnan Tin To Support Growth  53
Latest Developments . 53
Table: Tin Production Forecast (China 2012-2020) . . . 53
Table: China Selected Tin Projects . . . 53
Structural Trends ..... 53
Risks To Outlook ...... 55
Lead: Stagnant Growth Ahead ....... 56
Latest Developments . 56
Table: Lead Production Forecast (China 2012-2020) . 56
Table: China - Select Lead Mining Projects 56
Structural Trends ..... 57
Risks To Outlook ...... 58
Zinc: Growth To Slow, Imports To Rise .... 59
Latest Developments . 59
Table: Zinc Production Forecast (China 2012-2020) . . 59
Table: China - Select Zinc Projects . . . 59
Structural Trends ..... 60
Industry Risk Reward Ratings  64
Risk/Reward Index ..... 64
Rewards ........ 64
Industry Rewards ..... 64
Country Rewards ..... 64
Risks .... 64
Industry Risks . 64
Country Risks . 65
Asia Risk/Reward Index ....... 65
Key Takeaways ........ 65
Latest Revisions ....... 66
Table: Asia - Mining Risk/Reward Index . . . 67
Regulatory Development ........ 68
Trade And Investment Risk Analysis ........ 68
Commodities Forecast .. 72
Commodity Strategy ... 72
Ferrous Metals ........ 72
Iron Ore: Price Weakness To Continue Over Coming Years ... 72
Steel: Oversupply To Drag Down Prices .. 74
Non-Ferrous Metals . 77
Aluminium: Continued Weakness, But No Sharp Downturn .... 77
Copper: Recent Relief Rally To Fade ...... 79
Lead: Prices Weakness To Continue ....... 80
Nickel: Subdued Prices Due To Weak Demand Growth  81
Tin: Supply Deficits To Underpin Rally In Tin Prices ... 82
Zinc: Positive Multi-Year Outlook, But Increasing Risks In Months Ahead .. 83
Table: Select Commodities - Performance & BMI Forecasts 85
Competitive Landscape . 86
Majors Firms . 87
Table: China - Key Financial Data For Select Listed Mining Companies . . . . . 87
Company Profile .... 89
Jiangxi Copper . 89
Table: Supply Chain Analysis . . . 92
Table: Jiangxi Copper - Key Financial Data . . . . . 92
Shandong Gold  94
Table: Supply Chain Analysis . . . 96
Table: Shandong Gold - Key Financial Data . . . . . 96
Global Company Strategy - Aluminum Corporation of China (Chalco) - Q3 2016 ... 98
Table: Select Commodities - Price Forecasts . . . 100
Company Background ...... 100
Table: Chalco - Key Financial Data . 105
China Shenhua Energy ...... 106
Table: Shenhua Energy - Supply Chain Analysis 108
Table: China Shenhua Energy - Key Financial Data . . 109
Regional Overview ....... 110
Asia Overview  110
Slowing Iron Ore Production ...... 110
Indian Coal Consumption To Outperform ....... 111
China & India To Lead In Outbound Investment ....... 112
Indonesian Ban Moderation Ahead ....... 114
Chinese Coal & Steel Sectors To Consolidate Slowly . 115
Methodology ........ 117
Industry Forecast Methodology .. 117
Sources ....... 118
Risk/Reward Index Methodology . 119
Table: Weighting Of Indicators 120
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