Mozambique Mining Report

 Published On: Sep, 2016 |    No of Pages: 53 |  Published By: BMI Mining | Format: PDF
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BMI View: Mozambique's mining revenue will remain heavily dependent on the country's coal sector, leaving the sector exposed to continued global coal price weakness. Despite this, coal production growth will continue to exceed gold output growth. Furthermore, both sectors will continue to attract interest from overseas investors.

Latest Developments & Structural Trends
-We remain bullish towards gold prices and have marginally bumped up our 2016 and 2017 price forecasts to USD1,300/oz (from USD1,275/oz) and USD1,400/oz (from USD1,350/oz), respectively. Economic (slowing US growth) and political (Brexit) developments in recent months have reinforced our belief that real interest rates in developed markets will remain depressed through 2016-2018 at least. While this trajectory has largely been priced into markets for 2016, we expect that real rates will surprise to the downside in 2017-2018. This will come as global inflation and economic growth surprise to the upside and downside, respectively.
-The suspension of donor aid to Mozambique in the wake of the hidden debt scandal has prompted us to downgrade our construction growth forecasts for 2016, to 4.0% in real terms down from the original projection of 4.8%. The government will struggle to fund the road and social infrastructure projects earmarked in its budget, as the weak commodities outlook alongside high recurrent expenditure weighs on the fiscal balance.

BMI Industry View ... 7
BMI Industry View ....... 7
Table: Mozambique Mining Industry Value . . . . 7
Latest Developments & Structural Trends .. 7
SWOT ...... 9
Industry Forecast .. 11
Coal: Infrastructure & Low Prices To Constrain Growth ........ 11
Latest Developments . 11
Table: Mozambique - Coal Production Forecasts . . 11
Table: Mozambique - New Coal Projects . 12
Structural Trends ..... 12
India & Japan To Ramp Up Investment .. 13
Price Drop Hits Profitability Though Not Output ........ 15
Infrastructure Remains Key Challenge .... 16
Gold: Growth To Lack Behind Coal Sector 18
Latest Developments . 18
Table: Mozambique - Gold Production Forecast . . . 19
Table: Mozambique - Gold Projects 19
Structural Trends ..... 19
Exploration Points To Potential Long-Term Expansion 19
Industry Risk Reward Ratings 22
Mozambique - Mining Risk/Reward Index . 22
Rewards ........ 22
Industry Rewards ..... 22
Country Rewards ..... 22
Risks .... 22
Industry Risks . 22
Country Risks . 23
Africa - Risk/Reward Index ... 23
Key Takeaways ........ 23
Latest Revisions ....... 24
Table: Africa - Mining Risk/Reward Indices . . 25
Regulatory Development ........ 26
2015-Recent Developments . 26
Trade & Investment Risk Analysis . 27
Commodities Forecast .. 31
Commodities Outlook . 31
Table: BMI Commodities Price Forecasts . . . . 31
Competitive Landscape . 33
Table: Select Companies - Comparative Metrics . . 34
Company Profile .... 35
Global Company Strategy - Vale - Q4 2016 ........ 35
Company Overview .. 37
Company Strategy .... 38
Table: Select Companies - Operational Data . 40
Table: Vale - Key Financial Data . . . 41
Regional Overview 42
Sub-Saharan Africa Overview ........ 42
Table: SSA - Government Involvement In Mining Sector . . . . 48
Methodology . 50
Industry Forecast Methodology .... 50
Sources 51
Risk/Reward Index Methodology ... 52
Table: Weighting Of Indicators . 53
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