Mining the Americas in 2019 — a forecast
Analysts at Fitch Solutions are feeling bullish from spot levels on nickel, lead, copper, tin and gold over 2019, but are bearish on iron and coal, according to new reports on mining the Americas.
The outlook for Americas mining remains positive over the coming years, but miners will face challenges from tension over water usage from local communities if El Niño strikes and political uncertainty stemming from recent election outcomes and corruption scandals.
Fitch forecasts the mining industry recovery will continue on track, supported by a strong project pipeline and a positive outlook for prices from 2018’s rout.
The analysts predict miners will remain committed to supply and capital restraint, prioritising joint ventures and brownfield investment, and that a strong demand for cobalt, driven by the rapidly growing electric vehicle and battery storage sectors, will prompt significant investment in this nascent mineral sector in the Americas.
Copper will remain at the forefront with firms sprinting towards acquiring additional capacity for the same reason, the report reads.
Canada’s cobalt sector and Ecuador’s budding mining sector for copper and gold will be investment hot spots, analysts contend. Peru and Chile will continue to attract copper investment, currently accounting for 64% of new copper projects for Latin America in Fitch’s Global Mines Database.
Chile and Canada will stand out as leaders in integrating innovative technology and alternative less polluting energy sources into mining operations in a bid to remain profitable over the long term as the world transitions to a low carbon economy, Fitch forecasts.
Less rainfall could spell higher energy costs and lower mining production for miners in countries such as Brazil, Colombia, and Ecuador. Chile and Peru stand to benefit from the increased tax revenue generated from higher copper prices while Brazil will be hurt by a fall in iron ore, as the metal is the cornerstone of Brazilian mining.
The US mining industry will not fare as well in 2019, as Fitch forecasts thermal coal prices declining on top of a structural decrease in thermal coal consumption by the country.
Read the full report here.