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South Africa Mining Report Q1 2016

  • January 2016
  • -
  • Business Monitor International
  • -
  • 90 pages

Includes 3 FREE quarterly updates

BMI View: South Africa's mining sector will face persistent headwinds due to labour unrest, mineral priceweakness, further divestments and retrenchment.

Latest Updates And Structural Trends

- On December 8 2015, Anglo American announced a restructuring plan that will focus on divestment ofnon-core and loss-making assets, downsizing its workforce and consolidating business divisions in aneffort to weather ongoing commodity price weakness. South Africa's coal industry will be significantlyhit by Anglo's restructuring plans as the firm accounts for nearly 21.5% of the country's total thermal coalproduction. Furthermore, Anglo's plans to cut employment will hit the sector as well, as Anglo employsover 24,500 in their thermal coal operations, while the firm's total employment within South Africa totals72,000.

- As Anglo American is keen to offload the majority of its South-African assets, this could result in asignificant decline in the country's coal production growth. As such, we revised down our 2016 and 2017coal production forecast from 1.3% to -4.0% and 1.0% to -1.5%, respectively. Despite this, South Africa,which is Sub-Saharan Africa (SSA)'s largest coal producer, with a 94.6% share of regional coalproduction in 2015, will remain the region's largest coal producer. We forecast South Africa's coalproduction to grow from 252million tonnes (mnt) in 2016 to 264mnt in 2019. This would representaverage annual growth of 0.1% during 2016-2019, slightly higher than the average 0.9% decline during2010-2014.

Table Of Contents

South Africa Mining Report Q1 2016
BMI Industry View 7
Table: South Africa Mining Industry Value Forecast 7
Latest Updates And Structural Trends 7
SWOT 9
Industry Forecast 11
Coal: Growth To Pick Up Beyond 2017 11
Latest Updates 11
Table: Coal Production Forecast (South Africa 2014-2020) 11
Table: South Africa - Major Coal Projects and Expansions 12
Structural Trends 12
Gold: Growth To Grind To A Halt 18
Latest Updates 18
Table: Gold Production Forecast (South Africa 2014-2019) 18
Structural Trends 20
Iron Ore: Weak Prices To Curb Growth 24
Latest Updates 24
Table: Iron Ore Production Forecast (South Africa 2014-2020) 24
Table: South Africa - Major New Iron Ore Projects and Expansions 25
Structural Trends 25
Platinum: Production Downturn Due To Rising Costs 27
Latest Updates 27
Table: South Africa - Platinum Mine Production and Growth (2014-2019) 27
Structural Trends 27
Palladium: Sector To Face Numerous Challenges 33
Latest Updates 33
Table: Palladium Production (South Africa 2013-2019) 33
Table: South Africa - Palladium Projects 33
Structural Trends 34
Industry Risk Reward Index 36
South Africa Risk/Reward Index 36
Rewards 36
Risks 36
Africa: Major Risks Remain 38
Key Takeaways 38
Latest Revisions 39
Table: Africa - Mining Risk/Reward Index 40
Regulatory Development 41
Trade and Investment Risk Analysis 41
South Africa - Mining Industry End Game: Four Potential Scenarios 44
Table: Mining Sector Scenarios 45
Commodities Outlook 51
Table: BMI Commodities Price Forecasts 51
Competitive Landscape 52
Table: South Africa - Largest Mining Companies' Financial Data, 2014 53
Company Profile 55
Global Company Strategy - AngloGold Ashanti - Q1 2016 55
Overview 57
Strategy 57
Risks 58
Latest Results 59
Table: AngloGold Ashanti - Key Financial Data 60
Global Company Strategy - Impala Platinum - Q1 2016 61
Table: Impala Platinum - Key Financial Data 65
Anglo American - Q1 2016 67
Company Strategy 69
Latest Results 70
Table: Anglo American - Financial Data 71
Anglo American's Plan: South Africa To Be Hit Hardest 72
Table: Anglo American - Mines and Projects 79
Regional Overview 82
Africa Mining: The Four Key Themes 82
Key Themes 82
Chinese Investment To Continue 82
Iron Ore Price Weakness To Curb Growth 83
Regulatory Uncertainty To Curb Growth 84
Mining To Remain Key Contributor To GDP 86
Methodology 87
Industry Forecast Methodology 87
Sources 88
Risk/Reward Index Methodology 89
Table: Weighting Of Indicators 90

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