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Mozambique Mining Report Q2 2013

  • Publication Date:March 2013
  • Publisher:Business Monitor
  • Product Type: Report
  • Pages:68
  • ISBN:184921

Mozambique Mining Report Q2 2013


Includes 3 FREE quarterly updates

Mozambique will be one of the major growth stories in the global mining sector over the coming years as a
combination of enormous coal reserves and sound business environment coalesce to provide rapid growth in
output. We expect the value of the country's mining sector will reach US$735mn in 2017, from US$178mn
in 2011. This growth supports our bullish view for the Mozambican economy and will see the mining sector
rise from 1.5% of GDP in 2011 to 2.9% in 2017. Almost all of the country's coal production will be
exported and thus the country will become a key driver of export growth in future, with India and China the
main destinations. While the outlook for the sector is positive, concerns remain surrounding the capacity of
the country's freight transport infrastructure to cope with the projected increase in mineral production over
the next few years. Attempts to increase freight capacity have so far been met with considerable
complications.
The Mozambican government plans to submit a draft of a revised mining law by the end of the year in a bid
to streamline procedures and attract more investment to its booming coal sector. The government has stated
that its new mining code will not change royalties or mining taxes, and is purely to speed up the licence
process and reduce bureaucracy for mining investment, a move that appears to be wholly positive for the
sector. Mozambique is well positioned to benefit from increasing regulation elsewhere on the continent as
the country seeks to open up its mining sector to greater foreign investment. This comes at a time when
much of Africa, and the rest of the world, is seeking to increase the state's involvement in their respective
mining sectors.
BMI Industry View . 7
SWOT . 9
Industry Forecast 10
Gold: Production To Triple . 10
Table: Mozambique - Gold Projects . . . 11
Table: Mozambique - Gold Production 11
Coal: Mozambique To Become Global Growth Driver 12
India To Make Its Presence Felt 13
Table: Mozambique - Largest Coal Expansion Plans . 15
Infrastructure Likely To Weigh On Growth . 15
Table: Mozambique - Coal Production Forecast . . . . . . . 15
Industry Risk Reward Ratings 16
Africa Risk/Reward Ratings . 16
Table: Africa - Recent Government Intervention . . . . . . . 16
Elevated Prices Increase Rewards, But Political Risks Lurk . 16
Table: Africa - Mining Risk/Rewards Ratings . . 17
Botswana: All Round Outperformer 18
South Africa: Nationalisation Fears Overblown . 18
Zambia: Investment To Continue Despite Higher Taxes . 19
Mozambique: Mining Sector Set To Boom 20
Sierra Leone, Mali, Guinea, Côte d'Ivoire: Massive Reserves But Uncertain Outlook 21
DR Congo: Huge Resources, Enormous Risks 21
Zimbabwe: Uncertainty To Deter Investment . 21
Market Overview . 23
Coal To Fuel Mining Sector Growth 24
Regulation To Become More Supportive . 24
Table: Table: Mozambique - Key Expansion Plans . . . . 24
Infrastructure The Key Risk 25
Table: Mozambique - Mining Industry Value & Production . . 25
Regulatory Development 26
Recent Developments 26
Positive Regulatory Structure To Support Investment 26
Tax Regime 28
Corruption To Remain Key Concern 28
Table: Political Overview . . . . . . . 29
Commodities Forecast . 30
Commodity Strategy - Monthly Metals Update 30
Iron Ore . 31
Steel . 33
Aluminium . 34
Copper 35
Lead . 36
Nickel . 37
Tin . 38
Zinc 39
Table: Select Commodities - Performance And BMI Forecasts 39
Table: BMI Commodity Strategy Table . 40
Competitive Landscape 41
Table: Select Companies Comparative Metrics 42
Company Profile 43
Vale . 43
Rio Tinto . 48
Regional Overview 53
1. Lack Of Infrastructure Is The Greatest Challenge . 53
2. Resource Nationalism Will Increase . 54
Table: Recent Government Intervention . . . . . . . 54
3. Continuing Chinese Investment Into Africa 55
4. Iron Ore Production In West Africa To Boom . 56
5. Southern Africa To Become A Key Coal Exporter 57
Global Industry Overview 58
Global Mining Outlook . 58
1. Winners And Losers In 2013 . 58
Table: Recent Tax Increases . . . 58
2. China Slowdown To Weigh On Mining Equities 59
3. Capex At Risk As Prices Head Lower 60
4. Africa To Continue Attracting Chinese Attention . 61
5. Changing Global Coal Trade Dynamics 62
6. Greater Industry Consolidation . 64
7. New Destinations To Attract Substantial Investment 64
Methodology 66
Risk/Reward Ratings Methodology 66
Table: Mining Business Environment Indicators . . . . . . . 67
Table: Weighting Of Components . . . . . . 68
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