Market Report, "United States Mining Report Q4 2012", Published

New Materials market report from Business Monitor International: "United States Mining Report Q4 2012"

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Boston, MA -- (SBWire) -- 11/12/2012 --With emerging markets attracting the bulk of mining investment we see quite slow growth across mineral products in the US over our forecast period. We forecast the value of the US mining industry to reach US$74.1bn in 2012, representing a contraction from 2011. This is due primarily to our outlook for weaker copper and coal prices. We see the domestic mining sector growing at a slower pace than many developed market peers such as Canada and Australia, but believe promising opportunities for mine development in the US still exist. With metals prices to stay elevated by historical standards, previously uneconomical deposits may become mineable again.

The key drivers of our industry growth forecasts will remain minerals for which global prices and fundamentals remain favourable, primarily copper and gold. Though we see a number of copper project expansions on the horizon in an effort to counteract several decades worth of falling ore grades in the US, we anticipate that weakness in copper consumption growth from China will weigh on company growth plans in the coming years. Falling prices and slower-than-expected growth in Chinese copper demand may force miners to rethink investment expenditures. Furthermore, we see minimal investments into mineral resources for other base metals. 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 heavily in developing these resources.

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Regulatory Hurdles Hurt Competitiveness

The US maintains one of the most favourable business environments in the region and indeed the world. Political stability and investor friendly policies that create few barriers to entry are favourable for mining sector development. Furthermore, established mining sector infrastructure and developed regulatory and legal environments protect mining companies from unexpected or unforeseen risks. That said, environmental opposition to mine projects is quite strong in the US and such protests and public campaigns may derail project plans and put pressure on politicians to introduce new restrictions on mining. Furthermore, federal level pollution controls will likely weigh on growth for coal mining companies as power generation capacity in the US shifts away from aging, more polluting technologies to cheaper cleaner alternatives such as natural gas.

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