Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr
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conserve cash and resources, and weather out the storm—the storm in this context being muted demand and low commodity prices for most metals, including copper and iron. Miners have taken notice and started a series of cost-cutting measures. When Will Commodity Prices Rebound? Instead of a rebound in 2016, it appears that the industry may be on a more extend- ed correction, with slow sporadic growth over the next two to four years as commod- ity prices stabilize and rebound. When it comes to commodity consump- tion and subsequent mining project devel- opment, China cannot be ignored: It con- sumes 40% to 50% of the world's com- modities, including aluminum, copper, nick- el, zinc, lead, coal, iron ore and steel. But China's appetite has waned. Double-digit GDP growth in China has given way to 6%–7% growth projected through 2017. China's growing urban population boom and the subsequent build-out of infrastructure, commercial/residential construction and energy-related projects has slowed. That's why countries like Australia and Indonesia, which rely on China for a good portion of their iron ore and coal exports, are currently reeling from the slowdown in demand and subsequent commodity price deterioration. Not only is China a major importer of these commodities, but also a major miner. China is now the second-largest country for active mining project development after Canada. While near-term prospects for mining project development remain challenged at least into 2017, long-term growth prospects for the consumption of commodities remain positive, especially in the emerging econo- mies where demand is expected to grow. India is expected to eclipse China as the GDP growth leader with 7% growth expect- ed in 2016, and it is in desperate need of infrastructure. If India can solve corruption problems and a lengthy permitting process, there could be growth in mining project development in that country. State-owned coal miner Coal India recently announced that it would build an additional 15 coal preparation plants near its mines in India. What Countries Will See Mining Investment? Going forward, the usual suspects will con- tinue to dominate mining project develop- ment. The top 10 countries for active min- ing projects based on largest total invest- ment value of projects are Canada, China, Australia, India, the U.S., Brazil, Russia, Chile, Peru and South Africa. These coun- tries account for 75% of global mining project development. Latin America continues to be one of the world's hottest regions for mining project investment. The region holds more than 25% of the mineral exploration market and more than 45% of the world's production of silver and copper. With more than 800 pro- jects totaling $307 billion, Latin America accounts for about 20% of the world's min- ing projects based on total investment value, according to Industrial Info's Global Mining Project Database . Leading Latin American countries for mining project development include Brazil, Chile and Peru, which have vast reserves of iron ore, copper and gold, to name a few. There's growing activity in African coun- tries, which have emerged as a destination for mining projects to supply metals and minerals to Asian countries. Both China and India are investing heavily in mining pro- jects in Africa. For example, China-based Zijin Mining Group, the largest miner of gold and second-largest miner of copper in China, recently acquired 49% of the Kamoa copper project in the Republic of Congo. Right now, mining firms are developing $118.4 billion in active projects in Africa. South Africa continues to be the mining epicenter in the continent, with 156 pro- jects totaling $32.9 billion. In addition, significant projects are being developed in Congo, Mozambique, Guinea, Tanzania, Namibia and Botswana, to name a few. In Ethiopia, Norway-based Yara Inter- national is proceeding with plans to con- struct a $740-million potash mine using solution mining technology. SNC Lavalin has recently received the award for the front-end engineering design, as well as engineering procurement and construction management. Iron Ore: Overcapacity is an Obstacle Mining firms are developing 836 iron ore projects totaling $249 billion worldwide. China, Australia, Brazil and India are the top four iron ore mining countries in the world based on production. So it is not sur- prising that these four countries are in the top five, along with Canada, for iron ore mining project development, accounting for 62% of the world's iron ore mining projects. Like other metal commodities, iron ore prices have dropped to 10-year lows and are predicted to remain low. New capacity coming online, like the Roy Hill mine in Australia, certainly won't help the situation. China's steel industry, which has experi- enced phenomenal growth over the past 10 years, is in overcapacity. The country has JANUARY 2016 • E&MJ; 21 www.e-mj.com P R O J E C T S U R V E Y 2 0 1 6