Mongolia Mining Report Q2 2016

Date: March 9, 2016
Pages: 73
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: MB196135F7EEN

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BMI View: Mongolia's mining sector growth will accelerate on the back of foreign mining investment, a robust infrastructure framework and the country's strategic close proximity to major export markets such as China. Projects such as Rio Tinto's Oyu Tolgoi mine will significantly increase the country's mining output over the coming years.

Latest Developments & Trends
  • On May 18, 2015, an agreement was reached between Turquoise Hill (a Rio Tinto subsidiary) and Mongolia's government to go ahead with a USD5.4bn underground expansion. Accordingly, in December 2015 Rio Tinto announced that the company has lined up a combined USD4.4 billion from 20 lenders to fund the expansion of Oyu Tolgoi. The end of the deadlock between the Mongolian government and Turquoise Hill Resources over the Oyu Tolgoi mine in Mongolia's South Gobi region further supports our view of rapid long-term growth in Mongolia's gold and copper output. An increasingly favourable investment climate will allow overseas miners to take advantage of the country's considerable gold and copper reserves. The Oyu Tolgoi mine will be the sector's key growth driver and account for around onethird of Mongolia's economy once the mine reaches full production capacity in 2021.
  • Despite calls for greater resource nationalism over the past quarters, we believe the Mongolian government will tone down its anti-foreign investment stance against miners. The government's policy priorities will shift away from the populist tones outlined during the 2013 election campaign, back to a more market-friendly platform. However, anti-foreign investor sentiment amongst the public remains a major issue, and is the key reason why the government took a more pronounced hard-line stance towards key foreign investors in the country, notably global mining major Rio Tinto. The split in the super coalition is a signal that political will power to push through deals is waning. We are not optimistic on the prospects for progress on the Tavan Tolgoi projects as the government is unlikely to want to tackle the issue with an election around the corner.
BMI Industry View
  Table: Mongolia Mining Industry Value
Latest Developments & Trends
Industry Forecast
Mongolia - Coal: Ready To Tap Into Chinese Demand
Latest Developments
  Table: Mongolia Coal Production Forecast
  Table: Mongolia - Select Coal Projects
Structural Trends
Mongolia - Copper: Good News For Growth Prospects
Latest Developments
  Table: Mongolia - Copper Mine Production Forecast
  Table: Mongolia - Select Copper Mine Projects
Structural Trends
Gold: OT To Drive Growth
Latest Developments
  Table: Gold Production Forecast (Mongolia 2012-2020)
  Table: Mongolia - Select Gold Projects
Structural Trends
Industry Risk Reward Ratings
Mining Risk/Reward Index
Industry Rewards
Country Rewards
Industry Risks
Country Risks
Asia Risk Reward Index
Australia Stays On Top While India & Myanmar Gain
Shifting Scores Reflect Changing Sector Dynamics
  Table: Asia - Mining Risk/Reward Index
Regulatory Development
Mining Reforms To Lift Exploration
Trade & Investment Risk Analysis
Commodities Forecast
Commodity Strategy
Ferrous Metals
Iron Ore: Price Weakness To Continue Over Coming Years
Steel: Oversupply To Drag Down Prices
Non-Ferrous Metals
Aluminium: Continued Weakness, But No Sharp Downturn
Copper: Recent Relief Rally To Fade
Lead: Prices Weakness To Continue
Nickel: Subdued Prices Due To Weak Demand Growth
Tin: Supply Deficits To Underpin Rally In Tin Prices
Zinc: Positive Multi-Year Outlook, But Increasing Risks In Months Ahead
  Table: Select Commodities - Performance & BMI Forecasts
Competitive Landscape
Improving Environment To Attract More Foreign Investment
  Table: Mongolia - Financial Data Of Key Listed Companies
Company Profile
Centerra Gold
  Table: Centerra Gold - Supply Chain Analysis
Latest Results
  Table: Centerra Gold - Key Financial Data
Turquoise Hill Resources
Latest Results
  Table: Turquoise Hill - Suppliers
  Table: Turquoise Hill - Key Financial Data
Global Company Strategy - Rio Tinto - Q2 2016
Company Overview
Company Strategy
  Table: Rio Tinto - Key Projects
Latest Financial Results
  Table: Rio Tinto - Key Financial Data
Regional Overview
Continued Domination Of Iron Ore Production
Indian Coal Consumption To Outperform
China & India To Lead In Outbound Investment
Indonesian Ban To Continue
Industry Forecast Methodology
Risk/Reward Index Methodology
  Table: Weighting Of Indicators
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