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State of the Market: Mining
Presenter: Chris Hinde, London
Researcher: Sussie Gylesjö, Stockholm
Mining on Top: Stockholm
...
ABOUT THE COMPANY
Over 30 years of providing mining information:
Databases, consultancy, maps, reports and conferences
Dat...
FIRST, AN OVERVIEW
Annual global output

ORE
(Mt)
7,000

WASTE
(Mt)
13,000

TOTAL
(Mt)
20,000

Aggregates

15,000

0

15,0...
CAUSE FOR HOPE
Metals demand follows global GDP
25

% changes from previous year

20
15
10
5
0
1970

1973

1976

1979

198...
Prices follow OECD output
20

120
100
Non-ferrous metal prices

Industrial output

10

80
60
40

5

20

0

0

1971 1974 19...
And metals demand is linked to
population and urbanisation
Australia

100%

Chile

90%

COPPER
CONSUMPTION

Brazil

SK

US...
Shape of the international
mining industry

• Surface/underground ratio = 60/40 physical operations
• Surface mines and qu...
Recent mining performance
During the past few years, the mining industry has
found itself between a rock and a hard place....
Coal: Price roller-coaster
Story of the whole mining sector!
Australian thermal coal (US$/t)
180

9 month
collapse

140

2...
But no energy in coal this year

Continued
slump in
coal prices

Down 16%
before ‘recovery’
Still, mining can not be ignored

Extracted total worth some US$1,900 billion pa:
US$700 billion - metals and gems
US$660 ...
At the commodity level
Mid 2013

MINED
(‘000t)
Coal
Iron Ore
Copper
Gold
Nickel
Zinc
PGMs
Diamonds
Bauxite
Lead
Top Ten To...
At the regional level: African exploration

56.4%
7.9%
7.9%
6.3%
5.1%

Exploration
financing in the
24 months to
end-May 2...
Latin American exploration finance

24%

Over 24 months to
end-August 2013
Latin American exploration drilling

34%

32%
NOW THE CURRENT STATUS
State of the Market:
Mining and Finance Report
Quarter to end-September
Global mining industry
End-September 2013

57% of
industry

<US$1m
in cash
Global exploration projects

Red – Copper
Yellow – Gold/Silver
Green – Iron Ore
Blue – Nickel/Lead/Zinc
Purple – PGMs
Pink...
Quarterly drilling reports
18-month decline

?
SOTM: Mining and Finance Report
SOTM: Mining and Finance Report
Value of mining deals
SOTM: Mining and Finance Report

27% of
year ago
Reason for optimism
(RMG analysis)
Extracted ore (Mt)
Forecast
RMG analysis of projects

Mining industry capital expenditure (US$ million)

Forecast
Long-term demand certainty

Twice world
average

Source: 2011, Minerals Information Institute, SME Foundation
If we are all American …

By 2100, every world citizen born will need…

Source: 2011, Minerals Information Institute, SME ...
Much more copper …

By 2100, every world citizen born will need…

Source: 2011, Minerals Information Institute, SME Founda...
Huge new coal discoveries …

By 2100, every world citizen born will need…

Source: 2011, Minerals Information Institute, S...
But we are already producing
enough iron ore!
By 2100, every world citizen born will need…

Source: 2011, Minerals Informa...
State of the Market: Mining

That’s it, thanks

Chris Hinde
Editorial Director
IntierraRMG
Tel: +44 (0)20 7780 7471
Email:...
State of the Market: Mining
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State of the Market: Mining

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Mining On Top: Stockholm 2013
26-27 Nov 2013

State of the Market: Mining

Published in: Technology, Business
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Transcript of "State of the Market: Mining"

  1. 1. State of the Market: Mining Presenter: Chris Hinde, London Researcher: Sussie Gylesjö, Stockholm Mining on Top: Stockholm November 26th, 2013
  2. 2. ABOUT THE COMPANY Over 30 years of providing mining information: Databases, consultancy, maps, reports and conferences Databases ‒ Lease locations and ownership, company intelligence, drill results, project pipeline, due diligence reports, production statistics, finance, M&A activity etc. Reports ‒ Examination of the trends in exploration, mine development, metals production and finance. Events ‒ ‘Mining on Top’ conferences in Stockholm, Helsinki and London, and training seminars. Disclaimer: IntierraRMG makes reasonable and diligent efforts to obtain accurate information for our clients and presentations. No warranty, expressed or implied is made regarding the accuracy, adequacy, completeness, reliability, or usefulness of any information contained herein. Neither IntierraRMG nor the contributors of data to this presentation shall be held liable for any improper or incorrect use of the information contained herein and assume no responsibility for the use of the information.
  3. 3. FIRST, AN OVERVIEW Annual global output ORE (Mt) 7,000 WASTE (Mt) 13,000 TOTAL (Mt) 20,000 Aggregates 15,000 0 15,000 Coal Mines 8,000 7,000 15,000 Industrial Minerals 1,000 1,000 2,000 31,000 21,000 52,000 Metals Mines Total
  4. 4. CAUSE FOR HOPE Metals demand follows global GDP 25 % changes from previous year 20 15 10 5 0 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 -5 -10 -15 Global GDP Aluminium Copper Zinc -20 Courtesy Professor Phillip Crowson
  5. 5. Prices follow OECD output 20 120 100 Non-ferrous metal prices Industrial output 10 80 60 40 5 20 0 0 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 -5 -20 -40 -10 -60 Industrial output -80 -15 Note different scales for output and prices -20 -100 -120 Courtesy Professor Phillip Crowson Non-ferrous metal prices 15
  6. 6. And metals demand is linked to population and urbanisation Australia 100% Chile 90% COPPER CONSUMPTION Brazil SK USA: 80% 5.5kg/person Switzerland Russia 70% Malaysia G Japan Urbanisation 60% South Africa 50% World: Philippines 2.8kg/person Indonesia 40% Zambia 30% China Pakistan Thailand India 20% G = Germany Yellow = UK 10% SK = South Korea (17.4kg/person) 0% 1 10 100 Population (m) 1000 Source: ICSG, Raw Materials Group 10000
  7. 7. Shape of the international mining industry • Surface/underground ratio = 60/40 physical operations • Surface mines and quarries = 95% of all ore + rock output • Top ten companies = one-third of mined production • Total of almost 3,500 exploration and mining companies* (half of these being located in Canada). * These companies, and their projects/mines, are tracked in the IntierraLive database, and their performance reflected in the State of the Market reports.
  8. 8. Recent mining performance During the past few years, the mining industry has found itself between a rock and a hard place. Rock: Falling prices, with little prospect of an early recovery because of lacklustre demand. Hard Place: Pressure on operating costs and a heightened threat of resource nationalism. Problems compounded by the restricted supply of finance, especially for mineral exploration Disclaimer: IntierraRMG makes reasonable and diligent efforts to obtain accurate information for our clients and presentations. No warranty, expressed or implied is made regarding the accuracy, adequacy, completeness, reliability, or usefulness of any information contained herein. Neither IntierraRMG nor the contributors of data to this presentation shall be held liable for any improper or incorrect use of the information contained herein and assume no responsibility for the use of the information.
  9. 9. Coal: Price roller-coaster Story of the whole mining sector! Australian thermal coal (US$/t) 180 9 month collapse 140 20 month boom 100 Down again! 21 month recovery 60 3 years: stable 20 2004 2006 2008 2010 Monthly average price 2012
  10. 10. But no energy in coal this year Continued slump in coal prices Down 16% before ‘recovery’
  11. 11. Still, mining can not be ignored Extracted total worth some US$1,900 billion pa: US$700 billion - metals and gems US$660 billion - coal / lignite US$340 billion - cement and aggregates US$200 billion - industrial minerals
  12. 12. At the commodity level Mid 2013 MINED (‘000t) Coal Iron Ore Copper Gold Nickel Zinc PGMs Diamonds Bauxite Lead Top Ten Total 7,800,000 1,900,000 17,000 85 Moz 2.65 1,700 13,000 0.48 90 Mct 0.025 240,000 3,600 9,975,000 PRICE (US$/t) VALUE PA (US$ bn) 85 663 130 247 7,100 121 42,300,000 $1,300/oz 112 14,000 24 1,800 23 30,300,000 $950/oz 15 580,000,000 $115/ct 14 45 11 2,000 7 (124) 1,237
  13. 13. At the regional level: African exploration 56.4% 7.9% 7.9% 6.3% 5.1% Exploration financing in the 24 months to end-May 2013. Total = US$829m
  14. 14. Latin American exploration finance 24% Over 24 months to end-August 2013
  15. 15. Latin American exploration drilling 34% 32%
  16. 16. NOW THE CURRENT STATUS State of the Market: Mining and Finance Report Quarter to end-September
  17. 17. Global mining industry End-September 2013 57% of industry <US$1m in cash
  18. 18. Global exploration projects Red – Copper Yellow – Gold/Silver Green – Iron Ore Blue – Nickel/Lead/Zinc Purple – PGMs Pink – Aluminium White – Diamonds/Other Source: Raw Materials Database
  19. 19. Quarterly drilling reports
  20. 20. 18-month decline ?
  21. 21. SOTM: Mining and Finance Report
  22. 22. SOTM: Mining and Finance Report
  23. 23. Value of mining deals
  24. 24. SOTM: Mining and Finance Report 27% of year ago
  25. 25. Reason for optimism (RMG analysis) Extracted ore (Mt) Forecast
  26. 26. RMG analysis of projects Mining industry capital expenditure (US$ million) Forecast
  27. 27. Long-term demand certainty Twice world average Source: 2011, Minerals Information Institute, SME Foundation
  28. 28. If we are all American … By 2100, every world citizen born will need… Source: 2011, Minerals Information Institute, SME Foundation
  29. 29. Much more copper … By 2100, every world citizen born will need… Source: 2011, Minerals Information Institute, SME Foundation
  30. 30. Huge new coal discoveries … By 2100, every world citizen born will need… Source: 2011, Minerals Information Institute, SME Foundation
  31. 31. But we are already producing enough iron ore! By 2100, every world citizen born will need… Source: 2011, Minerals Information Institute, SME Foundation
  32. 32. State of the Market: Mining That’s it, thanks Chris Hinde Editorial Director IntierraRMG Tel: +44 (0)20 7780 7471 Email: chris.hinde@intierraRMG.com
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