Industry Trend Analysis - Brazil, Peru & Colombia: Low-Cost Mining Sectors To Outperform - MAR 2016

BMI View: Brazil, Peru and Colombia will emerge as regional mining industry growth bright spots in terms of both growth rate and absolute value, supported by low production costs and major project pipelines over our forecast period to 2020.

Brazil, Peru and Colombia's respective mining sectors will be growth outperformers in Latin America, due to competitive operating costs and strong project pipelines over the coming years. As miners adjust to structurally lower commodity prices, we expect these countries' low operating costs and vast reserves to partially offset the negative impact on investment of weak price headwinds. We forecast Brazil, Peru and Colombia's mining industry values to increase by USD8.2bn, USD4.9bn and USD3.9bn, respectively, over 2016-2020, averaging 1.2%, 4.3% and 4.0% annual growth, respectively. In comparison, leading copper producer Chile will see mining industry value increase by USD1.5bn, while Argentina and Mexico, countries with relatively smaller mining sectors, will add USD1.0bn and USD2.1bn, respectively, over our forecast period to 2020.

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Select Countries - Mining Industry Value Growth (LHC, % y-o-y) & Mining Industry Value (RHC, USDbn)
f = BMI forecast. Source: National sources, USGS, BMI

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