Mozambique Mining Report Q1 2016

Date: December 2, 2015
Pages: 53
US$ 1,295.00
Report type: Strategic Report
Delivery: Download

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Includes 3 FREE quarterly updates

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
  • Mozambique's mining sector will remain under pressure on a number of fronts, most significantly coal price weakness. Low coal prices will undermine the development of the country's coking coal industry. We expect a number of Western mining firms to divest their exposure in Mozambique due to the country's inadequate infrastructure and high start-up costs. For instance, Rio Tinto exited its position from the market to be replaced by India's International Coal Ventures in Q414. In Q115, Vale sold a significant share of its stake in the Moatize coal mine to Japan-based Matsuoi & Co. However, the increasing apprehension of Western investors towards the market is being compensated for to a large extent by increased interest from Indian firms as they look to secure long-term sources of coal to meet growing domestic demand. A number of Indian firms have already entered the market as they look to take advantage of the country's strategic location across the Indian Ocean.
  • The country's long-term potential as a coal exporter will have to be considered against increasing political risk and government intervention in the mining sector. In Q114, Mozambique's government announced its intention to increase taxation on the mining sector and to ensure greater mineral wealth is allocated locally. Although we expect the country to remain amenable to foreign investment and to maintain a broadly attractive business environment, this policy move in the mining sector will be a cause for concern amongst investors.
BMI Industry View
  Table: Mozambique Mining Industry Value
Latest Developments & Structural Trends
Industry Forecast
Coal: Investment To Boost Growth
Latest Developments
  Table: Mozambique - Coal Production Forecasts
  Table: Mozambique - New Coal Projects
Structural Trends
India & Japan To Ramp Up Investment
Price Drop Hits Profitability Though Not Output
Infrastructure Remains Key Challenge
Gold: Growth To Lack Behind Coal Sector
Latest Developments
  Table: Mozambique - Gold Production
  Table: Mozambique - Gold Projects
Structural Trends
Exploration Points To Potential Long-Term Expansion
Industry Risk Reward Ratings
Mozambique - Mining Risk/Reward Index
Industry Rewards
Country Rewards
Industry Risks
Country Risks
Africa: Major Risks Remain
Key Takeaways
Latest Revisions
  Table: Africa - Mining Risk/Reward Index
Regulatory Development
Recent Developments
Trade & Investment Risk Analysis
Commodities Forecast
Commodities Outlook
  Table: BMI Commodities Price Forecasts
Competitive Landscape
  Table: Select Companies - Comparative Metrics
Company Profile
Rio Tinto - Q1 2016
Company Overview
Company Strategy
  Table: Rio Tinto - Key Projects
Latest Financial Results
  Table: Rio Tinto - Key Financial Data
Vale - Q1 2016
Company Overview
Company Strategy
Latest Results
  Table: Vale - Key Financial Data
Company Details
Regional Overview
Africa Mining: The Four Key Themes
Key Themes
Chinese Investment To Continue
Iron Ore Price Weakness To Curb Growth
Regulatory Uncertainty To Curb Growth
Mining To Remain Key Contributor To GDP
Industry Forecast Methodology
Risk/Reward Index Methodology
  Table: Weighting Of Indicators
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