New Market Report Now Available: Brazil Mining Report Q3 2012

Fast Market Research recommends "Brazil Mining Report Q3 2012" from Business Monitor International, now available

by Bill Thompson

(WireNews+Co) - Boston, MA - 25 October 2012

Brazil's mining sector is poised for a period of strong growth as domestic and foreign demand for mineral resources spurs investment. The sector remains relatively small as a percentage of GDP compated to regional mining peers such as Chile and Peru. However Brazil's large untapped reserves and generally favorable business environment make it a compelling sector growth story. Iron ore production will be the key driver of mining sector investment, but we expect significant growth in several base metals as well, providing opportunities for mining companies and investors. Investments into infrastructure in advance of the 2014 FIFA World Cup and 2016 Olympics will not only help support demand for raw materials, but also enable more efficient transport of mineral resources.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/456315_brazil_mining_report_q3_2012.aspx) (http://www.fastmr.com/prod/456315_brazil_mining_report_q3_2012.aspx)

We forecast that Brazil's mining industry will contract in 2012, due primarily to lower than average iron ore prices for the year. We expect the industry's value to reach US$61.7bn in 2016, up from US$51.0bn in 2012. Our below consensus view on Chinese economic growth has caused us to revise our forecasts for iron ore production downward. This has reduced our growth forecasts for the sector as a whole with average annual industry growth expected at 2.9% between 2012 and 2016.

Continued Growth In Iron Ore Production

Brazilian iron ore miner Vale will continue to dominate the mining industry well past our forecast period. The company's performance in 2011 supports our view that iron ore is driving sector growth. While the company has recently moderated its view towards sustained iron ore demand growth in China, the People's Republic will remain the world's largest steel producer in the coming years even as output growth slows. We expect China will be the largest importer of Brazilian iron ore for the foreseeable future. We have lowered our growth forecast for total iron ore output but see production rising to 491mnt (mn tonnes) by 2016, as companies bring multiple large projects online. Average growth over our 2012- 2016 forecast period is expected to be 4.5% year-on-year (y-o-y).

Vale's 2011 iron ore production came in at 322.6mnt, a y-o-y increase of 4.8%, as it increased output from the Carajas mines in Brazil. Production slowed in Q112 as harsh weather impacted operations. However iron ore will be the mainstay of the company's growth, with the Carajas Serra Sul mine expected to reach 90mntpa (mn tonnes per annum) in 2014. Vale's strong project pipeline both domestically and increasingly abroad, will help maintain its position as one of the world's leading iron ore miners.

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