ONA Plans May Shake Up Mining Sector
The Moroccan mining sector could be set for a boost following news in March 2010 that the country's two major conglomerates - Groupe ONA and parent company Societe Nationale d'Investissement (SNI) - are planning to merge, then delist from the local stock exchange and then look to divest majority stakes in key subsidiary companies. Among ONA's companies are diversified miner Managem and steel maker Sonasid.
The first companies likely to be divested are sugar maker Cosumar, food manufacturer Lesieur and dairy concern Centrale Laitiere. At present, no concrete information on future divestment plans for any mining concerns has been forthcoming. However, the intention of ONA seems to be to move away from having a hands-on management role in its subsidiary companies and to allow foreign partners to gain a stake. In 2009, ONA saw net income increase to MAD2.92bn (from MAD1.12bn in 2008), while revenues also climbed, by 1.9%. Helping the group's performance was a reduction in the losses made by mining concern Managem, which benefited from a recovery in metals prices, plus higher production levels, according to a report on Reuters. BMI will monitor the situation over the coming months to see if any new mining sector investment opportunities present themselves.
Country Overview
The Kingdom of Morocco's economically vital mining sector is dominated by phosphates, which account for some 95% of mineral production. This industry is also dominated by state-run OCP. Beyond phosphates, the country also produces manganese, lead, zinc, copper and cobalt.
The Office National des Hydrocarbures et des Mines (ONHYM) is the primary agency responsible for the exploration and promotion of national mineral resources. The other major state-owned organisation governing the mining industry is the Bureau de Recherches et de Participations MiniEres (BRPM), which is responsible for the development of most minerals found in Morocco. All mineral resources are the property of the state, which issues permits and licences for the exploration and exploitation of the resources. The current mining legislation in Morocco is based on the Mining Law (1951) and is enforced through executive orders and the Directorate of Mines. Under the law, a mining company may set up a tax-exempt reserve fund of up to 50% of the fiscal profits for exploration and development investment.
New Data
For 2010, BMI has made significant changes to the way in which we forecast mining data. As well as using local statistics agencies and associations, we now also draw on the expertise of the UN's Industrial Commodity Statistics Database, the US Geological Survey and the World Bureau of Metal Statistics for our historical export and production data. We then forecast this data using our own proprietary econometric model. Human intervention also plays a necessary and desirable role in our mining forecasting;
Industry Forecast
We are broadly favourable on the outlook for Morocco's mining sector over our forecast period to 2014 and we forecast an average annual growth rate of 4.13%. In particular, tin might prove to be an increasingly key commodity for Morocco, if Kasbah Resources decides to commission a mine at Achmmach in the years ahead.
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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 And Developments
Key Projects
- Phosphate
- Gold
- Copper
- Tin
- Uranium
- Diamonds
Business Environment
- Africa Overview
- Africa Mining Business Environment Ratings
- Table: Africa Mining Business Environment Ratings
- Morocco's Business Environment Ratings
Political Environment
Industry Forecast Scenario
- Commodities Forecast - Nickel To Average US$22,000/tonne In 2010
- Table: BMI Nickel Forecast
- Table: Nickel
- 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
- Morocco's Mining Industry Forecast
- Table: Morocco Mining Industry Forecast, 2007-2014f
Competitive Landscape
- Table: Key Players In Morocco's Mining Sector
Company Monitor
- Kasbah Resources
- Metalex Ventures
- Odyssey Resources
Global Assumptions Q310
- Table: Global And Regional Real GDP Growth And Exchange Rates, 2009-2012
- Table: GDP Growth, Inflation, Interest Rates And Exchange Rates, 2008-2014
- Table: Developed States' Real GDP Growth, 2009-2012 (% y-o-y)
- Table: Emerging Markets' Aggregate Growth, 2009-2012 (% y-o-y)
Business Environment Ratings Methodology
- Table: Mining Business Environment Indicators
- Table: Weighting Of Components
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