day 1 – opening session: What is the new ‘normal’ for mining? <br />What is the new ‘normal’ for mining?David Humphreys – ...
GLOBAL MININGINVESTMENT CONFERENCE 2010<br />Lead sponsors:<br />Media partners:<br />Other sponsors & participating organ...
What is the ‘New Normal’ for Mining ?<br />David Humphreys<br />DaiEcon Advisors<br />Presentation to Objective Capital’s ...
Elements of the ‘New Normal’<br /><ul><li>  Deleveraging
  Reregulation
Deglobalisation</li></li></ul><li> ‘New Normal’ for Mining<br /><ul><li>  On-going shift of markets to emerging economies
  Growing role of the state in affairs of the industry
  Fragmentation, volatility, change to corporate order </li></li></ul><li> ‘New Normal’ for Mining<br /><ul><li>  On-going...
  Growing role of the state in affairs of the industry
  Fragmentation, volatility, change to corporate order </li></li></ul><li>Government net debt<br />% of GDP<br />Japan <br...
OECD composite leading indicators<br />% change<br />USA<br />Eurozone<br />Japan<br />Source: OECD<br />
OECD industrial production <br />Index of IP, 2005=100<br />EU<br />USA<br />Japan<br />Source: OECD<br />
China and India: industrial production <br />Year-on-year % change<br />China<br />India<br />Source: OECD, NBS.  <br />
Composition of global growth<br />World GDP growth %, 5 year moving averages <br />Forecasts<br />Source:  IMF<br />
Developing world share of metal consumption <br />%<br />Sources: WBMS and worldsteel.  For steel, data is for 2008, not 2...
 ‘New Normal’ for Mining<br /><ul><li>  On-going shift of markets to emerging economies
  Growing role of the state in affairs of the industry
  Fragmentation, volatility, change to corporate order </li></li></ul><li>Metals prices since 1991<br />The Economist NFM ...
 ‘New Normal’ for Mining<br /><ul><li>  On-going shift of markets to emerging economies
  Growing role of the state in affairs of the industry
  Fragmentation, volatility, change to corporate order </li></li></ul><li>China’s global mining investment<br />Source: Mi...
Mining country governance indicators<br />Source: Worldwide Governance Indicators at http://info.worldbank.org/governance/...
Criticality matrix for the US <br />Source: US National Research Council, 2008<br />
 ‘New Normal’ for Mining<br /><ul><li>  On-going shift of markets to emerging economies
  Growing role of the state in affairs of the industry
  Fragmentation, volatility, change to corporate order </li></li></ul><li>Imports of advanced economies<br />$ billion <br...
Trade regionalisation<br />Growth in Asian trade<br />Index 2001=100 (exports)<br />Destination of Asian exports<br />Asia...
 Deglobalisation means for mining <br /><ul><li>  Geopolitical fragmentation and increased risk
  Volatile commodity and currency markets
  Weaker banks and less debt financing</li></li></ul><li>World’s largest mining companies <br />- By value of mine product...
World’s largest mining companies <br />- By value of mine production in 2008 - <br />Source: Raw Materials Group <br />
So what happens next?<br />
Metals prices and exchange stocks<br />Indexes 2000=100                                                              <br /...
China: fixed asset investment <br />Average annual % growth, nominal RMB terms<br />Sources: NBS<br />
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David Humphreys: Opening Session: What is the new 'normal' for mining?

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Day 1 - Opening Session: What is the new 'normal' for mining?

Objective Capital Global Mining Investment Conference 2010
Stationers' Hall, City of London
28-29 September 2010
Speaker:
David Humphreys - DaiEcon

Published in: Investor Relations
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David Humphreys: Opening Session: What is the new 'normal' for mining?

  1. 1. day 1 – opening session: What is the new ‘normal’ for mining? <br />What is the new ‘normal’ for mining?David Humphreys – DaiEcon Advisors<br />
  2. 2. GLOBAL MININGINVESTMENT CONFERENCE 2010<br />Lead sponsors:<br />Media partners:<br />Other sponsors & participating organisations:<br />
  3. 3. What is the ‘New Normal’ for Mining ?<br />David Humphreys<br />DaiEcon Advisors<br />Presentation to Objective Capital’s Global Mining Investment conference, London, 28-29 September 2010<br />
  4. 4. Elements of the ‘New Normal’<br /><ul><li> Deleveraging
  5. 5. Reregulation
  6. 6. Deglobalisation</li></li></ul><li> ‘New Normal’ for Mining<br /><ul><li> On-going shift of markets to emerging economies
  7. 7. Growing role of the state in affairs of the industry
  8. 8. Fragmentation, volatility, change to corporate order </li></li></ul><li> ‘New Normal’ for Mining<br /><ul><li> On-going shift of markets to emerging economies
  9. 9. Growing role of the state in affairs of the industry
  10. 10. Fragmentation, volatility, change to corporate order </li></li></ul><li>Government net debt<br />% of GDP<br />Japan <br />Italy<br />USA<br />France<br />UK<br />Germany<br />Canada<br />Source: IMF<br />
  11. 11. OECD composite leading indicators<br />% change<br />USA<br />Eurozone<br />Japan<br />Source: OECD<br />
  12. 12. OECD industrial production <br />Index of IP, 2005=100<br />EU<br />USA<br />Japan<br />Source: OECD<br />
  13. 13. China and India: industrial production <br />Year-on-year % change<br />China<br />India<br />Source: OECD, NBS. <br />
  14. 14. Composition of global growth<br />World GDP growth %, 5 year moving averages <br />Forecasts<br />Source: IMF<br />
  15. 15. Developing world share of metal consumption <br />%<br />Sources: WBMS and worldsteel. For steel, data is for 2008, not 2009.<br />
  16. 16. ‘New Normal’ for Mining<br /><ul><li> On-going shift of markets to emerging economies
  17. 17. Growing role of the state in affairs of the industry
  18. 18. Fragmentation, volatility, change to corporate order </li></li></ul><li>Metals prices since 1991<br />The Economist NFM index, 2000=100 Gold price $/oz<br />Nonferrous metal prices<br />Gold<br />
  19. 19. ‘New Normal’ for Mining<br /><ul><li> On-going shift of markets to emerging economies
  20. 20. Growing role of the state in affairs of the industry
  21. 21. Fragmentation, volatility, change to corporate order </li></li></ul><li>China’s global mining investment<br />Source: Mining Journal, 13 August 2010<br />
  22. 22. Mining country governance indicators<br />Source: Worldwide Governance Indicators at http://info.worldbank.org/governance/wgi/index.aspCountries are rated accordingly to a variety of criteria and then ranked. The numbers shown are the quartiles into which the country falls on the given measure. 1 = first quartile. <br />
  23. 23. Criticality matrix for the US <br />Source: US National Research Council, 2008<br />
  24. 24. ‘New Normal’ for Mining<br /><ul><li> On-going shift of markets to emerging economies
  25. 25. Growing role of the state in affairs of the industry
  26. 26. Fragmentation, volatility, change to corporate order </li></li></ul><li>Imports of advanced economies<br />$ billion <br />forecast<br />Source: IMF<br />
  27. 27. Trade regionalisation<br />Growth in Asian trade<br />Index 2001=100 (exports)<br />Destination of Asian exports<br />Asia<br />World<br />Source: WTO<br />
  28. 28. Deglobalisation means for mining <br /><ul><li> Geopolitical fragmentation and increased risk
  29. 29. Volatile commodity and currency markets
  30. 30. Weaker banks and less debt financing</li></li></ul><li>World’s largest mining companies <br />- By value of mine production in 2008 - <br />Source: Raw Materials Group<br />
  31. 31. World’s largest mining companies <br />- By value of mine production in 2008 - <br />Source: Raw Materials Group <br />
  32. 32. So what happens next?<br />
  33. 33. Metals prices and exchange stocks<br />Indexes 2000=100 <br />Stocks<br />(r.h.s) <br />Nonferrous<br />metals prices <br />(l.h.s.)<br />Source: The Economist, LME, Comex and SHME. Stocks is a composite index, weighted by value. <br />
  34. 34. China: fixed asset investment <br />Average annual % growth, nominal RMB terms<br />Sources: NBS<br />
  35. 35. Steel use per unit GDP<br />Steel use (in t) per $m GDP<br />China<br />RoK<br />Thailand<br />Algeria<br />Slovenia<br />Slovak Rep<br />Austria<br />USA<br />India<br />Colombia<br />New Zealand<br />Norway<br />GDP per capita US$<br />Source: World Bank and worldsteel. GDP is PPP based. <br />
  36. 36. Current account imbalances<br />US$ bn<br />Source: IMF<br />
  37. 37. US trade deficit<br />$ billion sa<br />
  38. 38. Shares of world GDP<br />% of global GDP (market exchange rate basis)<br />EU<br />USA<br />Japan<br />China<br />Source: IMF<br />
  39. 39. Shares of world GDP<br />% of global GDP (market exchange rate basis)<br />EU<br />USA<br />Japan<br />China<br />Source: IMF<br />
  40. 40. What is the ‘New Normal’ for Mining ?<br />David Humphreys<br />DaiEcon Advisors<br />Presentation to Objective Capital’s Global Mining Investment conference, London, 28-29 September 2010<br />
  41. 41. GLOBAL MININGINVESTMENT CONFERENCE 2010<br />Lead sponsors:<br />Media partners:<br />Other sponsors & participating organisations:<br />
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