Recently released market study: Mongolia Mining Report Q3 2010

July 1, 2010 - PRLog -- One of the most important developments in recent months for the mining industry was a moratorium on the issuance of new licences which could limit foreign direct investment inflows this year. As a result, BMI forecasts a 9.64% contraction in the country's mining industry in 2010. This will take the sector's value down to MNT3,276bn (US$2.4bn) in 2010 and will end an eight-year run of volatile, double-digit growth as investor sentiment towards the country is damaged in the short-term. BMI holds to its core view that 2010 could be tough for Mongolia, as it also seeks to deal with the fiscal and social impact of a particularly harsh winter. That said, we still forecast the economy to grow 9.0% this year and believe that our medium-term bullish outlook remains in play.

For example, the developments related to the Oyu Tolgoi the largest undeveloped gold and copper mine in the world, will significantly boost the growth of the mining sector throughout the following years. Canada's Ivanhoe Mines, which is co-developing the deposit with Anglo-Australian firm Rio Tinto, revealed radically higher copper and gold estimates for Oyu Tolgoi shortly after the agreement became legally binding in March 2010.

On the back the development of deposits such as Oyu Tolgoi, BMI expects the mining industry to resume growth beyond 2010 with the sector strengthening by 5.8% in 2011 to MNT3,744bn (US$3bn). The growth of Mongolia's mining sector in the long-term will of course partly depend on the rate of its infrastructure development. The country will require between US$31bn and US$41bn for the purpose, according to Trade & Development Bank of Mongolia president Randolph Koppa.

In general, we believe that Mongolia's growth story remains firmly on track. Indeed, the freeze on mineral licenses is unlikely to affect existing permits, meaning that the development of key deposits by international heavyweights, such as Ivanhoe, are unlikely to be impacted substantially. Although the mineral license freeze highlights political risks, we believe that Mongolia's relatively favourable political and business environment by regional standards will keep investors interested. BMI sees growth accelerating to 9.32% and 13.7% in 2012 and 2013 respectively. At the end of our forecast period in 2014, the sector will grow by 15.49% to MNT6,472bn (US$6.27bn). BMI expects the mining industry to make up some 50% of Mongolia's GDP over the forecast period.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/71578_mongolia_mining_report_q...

Report Table of Contents:

Executive Summary
Global Mining Outlook
- Table: Rio Tinto's Capital And Major Evaluation Projects For 2010
- BMI Views
- Risks To Outlook
Industry Trends and Developments
- Overview
- Regulatory Structure
- Recent Developments
Key Projects
- Metals
- Gold
- Copper
- Minerals
- Fluorspar
- Coal
Mining Business Environment
- Asia Pacific Mining Business Environment
- Table: Asia Pacific Mining Business Environment Ratings
- Mongolia - Business Environment Ranking
- Limits of Potential Returns
- Risks to Realisation of Returns
- Legal Framework
- Property Rights
- Physical Infrastructure
- Labour Force
- Foreign Investment Policy
- Operational Risk
Political Environment
- Domestic Politics
Industry Forecast Scenario
- Commodities Forecast - Nickel To Average US$22,000/tonne In 2010
- Table: BMI Nickel Forecast
- Table: Nickel
- Market Strategy - Aluminium Update: Downside Risks To Average Price of US$2,100/tonne In 2010
- Market Strategy - Aluminium Update: Downside Risks To Average Price of US$2,100/tonne In 2010
- Table: BMI Aluminium Forecast
- Table: Aluminium
- Commodities Forecast - Gold To Average US$1,150/oz In 2010
- Table: BMI Gold Forecast
- Table: Gold
- Commodities Forecast - Copper
- Table: BMI Copper Forecast
- Table: Copper
- Mongolia's Mining Industry Forecast
- Table: Mongolia Mining Industry Data and Forecast, 2007-2014
Competitive Landscape
Company Monitor
- Centerra Gold Inc
- Erdene Gold Inc
- Ivanhoe Mines
- Solomon Resources Limited
- SouthGobi Energy Resources Ltd
Global Assumptions - Q3 2010 Update
- Table: Global & Regional Real Gdp Growth (%)
- Table: Real Gdp Growth (%) - Consensus Forecasts
- Table: Global Assumptions
- Table: Developed States, Real Gdp Growth Forecasts
- Table: Emerging Markets Aggregate Growth
Business Environment Ratings Methodology
- Table: Mining Business Environment Indicators
- Table: Weighting Of Components

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