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Just Released: "United States Mining Report Q1 2014"

New Materials research report from Business Monitor International is now available from Fast Market Research


Boston, MA -- (SBWIRE) -- 12/23/2013 -- Emerging markets will continue to attract the bulk of mining investment, leading us to forecast slow growth across mineral products in the US over our forecast period. We forecast the value of the US mining industry to reach US$66.1bn in 2017, representing an average growth rate of 1.5% per annum. The US mining sector is likely to grow at a slower pace than many developed market peers, such as Canada and Australia, but promising opportunities for mine development still exist.

Metal price trends and lower rates of metal intensity per unit of economic growth will keep mining sector growth minimal. We forecast falling copper and gold prices in 2014, while seeing only nominal growth in zinc and lead prices. Thus, we believe many mining firms will have little incentive to invest in expanding production or ore processing capabilities. While we expect copper mining operations to remain profitable, we note that gold producers, in particular, are coming under increasing pressure both from falling prices and rising costs. Thus, we expect capital expenditure to remain subdued over the coming quarters and expect consolidation among some junior miners. Weak market fundamentals for zinc and lead will keep price gains modest in the coming years and we do not expect domestic mining companies in the US to invest much in developing these resources.

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Solid Business Environment, But Long Wait Times

Despite weaker market fundamentals, we expect the US to attract mining investment due to its vast natural resources, well-developed industry and infrastructure, and stable political environment. The US's mature capital markets also allow junior firms to find financing opportunities, though credit remains tight. We expect US growth to pick up in the coming quarters, which should support end-use demand growth for metal products, although as we noted before developed world economic growth has become less metal-intensive over the past decade. Furthermore, we note that long mine permitting times raise development costs for firms. Given weak prices and reduced capital expenditure targets, such delays may limit the ability of firms to commit to projects in the coming quarters.

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