If signed into law by President Otto Perez, the recent Congressionally-approved legislation increasing mining royalties in Guatemala will increase the downside risks to our already downbeat outlook for the country's mining sector.
Continued weakness in gold prices over the coming months will put further downward pressure on gold mining equities into 2015. Meanwhile, subdued valuations will encourage merger and acquisition (M&A) activity within the gold sector as larger, better-capitalised miners with lower operating and financing costs seek to expand their asset base and project pipeline.
We expect the Bloomberg World Mining Index to trade within the 200-250 range over Q414. Persistent oversupply in the coal, iron ore and copper markets will continue to tame the recovery in mineral prices following significant declines over recent quarters. For instance, Newcastle steam coal prices have fallen 25% in the year-to-date, while iron ore prices collapsed 40% over the same period. Loo...
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Thanks, BMI Research