Engineering & Mining Journal

JAN 2019

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

Issue link: https://emj.epubxp.com/i/1070726

Contents of this Issue

Navigation

Page 21 of 59

PROJECT SURVEY 2019 20 E&MJ • JANUARY 2019 www.e-mj.com increase capacity of coal-fired power gen- eration. Coal accounts for 38% of global electricity generation. New coal-fired gen- eration capacity is coming online mainly in Asian countries, including Pakistan, Malaysia, Philippines and Vietnam, with strong demand in China and India. Aus- tralia and Indonesia remain the number one and number two coal-exporting na- tions, respectively. In India, non-coking coal consumption is slated to increase from 749 million mt in 2018 to 960 million mt in 2022. De- mand for metallurgical coking coal is ex- pected to reach 64 million mt in 2022, up from 54 million mt in 2017-2018, led by growth in steel and cement production. While demand has continued to increase, production has not followed suit, leading to increased imports. Coal India Ltd. accounts for 80% of the coal produced in India. This monopoly has led to poor coal production and sup- ply. The Indian government has moved to open up the sector to commercial miners through the auctioning of mining parcels. Lack of fuel is one of the reasons for the stress in the power sector. Plants are get- ting only 75% of the contracted supply from Coal India, which has resulted in major coal imports slated to touch 150 million mt in 2019, and is expected to reach 165 mining mt/y by 2022. In the U.S., the Environmental Protec- tion Agency (EPA) is replacing the Clean Power Plan with the Affordable Clean Energy Rule, which essentially lays down guidelines for states to implement rules. This will benefit U.S. coal mining firms in the short term, but long-term trends see coal continuing to lose market share to natural gas and renewables. The U.S. Energy Information Administration (EIA) has predicted that coal consumption will remain essentially flat through 2050 as the number of coal-fired power plant re- tirements slows and capacity utilization rates increase for the existing fleet. Bauxite/Aluminum In the U.S., the 10% Section 232 tariffs on primary aluminum imports are benefit- ting primary aluminum producers, a few of which have started up idled capacity, but there remains a large amount of ca- pacity offline as the world deals with over- capacity, especially in China. Downstream aluminum producers are benefiting from the light-weighting trend in the automo- tive and aerospace industries, which is driving numerous expansions in alumi- num rolling and foundry capacity. This is driving demand for bauxite and bauxite mining projects, especially in countries like Guinea, which is first in the world in bauxite reserves. Projects include Société Minière de Boke, which aims at exploit- ing a deposit that contains an estimated 430 million mt of bauxite near the Boke region. RUSAL started exporting bauxite ore from the Dian-Dian bauxite project in Guinea, and plans to restart the Friguia alumina refinery in Guinea, which has been shut since 2012. Copper In June 2018, copper prices reached the highest point since the bottom of the mar- ket in 2016. Prices have since declined due to trade protectionism policies and other market drivers, and reached 1-year lows during the third quarter of 2018. Copper miners are betting on the long- term demand for copper, which is expect- ed to appreciate, with demand outpacing supply in the next 5-10 years. Top copper mining projects currently under construction include: 1. Minera Panama – Cobre Panama project, (Panama) 2. Codelco – Chuquicamata Under- ground addition, (Chile) 3. Codelco – El Teniente new mining level, (Chile) 4. Oyu Tolgoi, (Mongolia) 5. BHP Billiton – Spence Growth pro- ject, (Chile) 6. Xizang Julong Copper Industry, (China) It is important to note that all of these projects are additions or expan- sions of existing operations, with the exception of the Chinese project, which is the sole grassroot activity. Four out of six of the projects are in Latin America and the other two are in East Asia. One of the copper projects to watch in 2019 is the $1.1 billion Los Pelambres cop- per mine expansion project in Chile, which recently received board approv- al. Antofagasta Minerals will begin con- struction in 2019. Precious Metals For precious metals, which includes gold, silver and platinum group metals, there is about $42 billion worth of projects scheduled to begin construction during 2019. The price of gold has declined sig- nificantly since peaking in April 2018 at around $1,350/oz, but the price is still favorable compared to the most recent low (2016) of around $1,000/oz. In conclusion, the global mining project spending outlook for 2019 is expected to be comparable to 2018 in magnitude, as leading indicators like GDP and commodity prices move side- ways. Grassroot projects are few and far between, while brownfield and existing mine expansion projects are preferred whenever possible. Joe Govreau is vice president of re- search-metals and minerals industry for Industrial Info Resources, a leading pro- vider of global market intelligence based in Sugar Land, Texas, USA.

Articles in this issue

Links on this page

Archives of this issue

view archives of Engineering & Mining Journal - JAN 2019