Rising geopolitical tensions and pressures to the
global economy will continue to evoke volatility in commodity markets,
heightening risks to metal demand and prices, Fitch Solutions’ newest report on
key Asia mining themes finds.
The Asian mining landscape will continue to benefit
from the availability of high-grade resources and low labour costs, although
key countries will grapple with policy uncertainty, resource nationalism and
environmental protection, the analyst says.
Indonesia’s policy uncertainty and resource nationalism will rumble on, Fitch forecasts,
with the new nickel ore export ban taking effect from January 2020.
Mongolia will continue to register the fastest mining
industry value growth in Asia with high-grade reserves of gold, copper and
coal, and a strong pipeline of large projects, the report reads.
Stricter environmental standards in Asia will
continue to hurt miners, Fitch forecasts, especially in the coal and metal
smelting sectors, by increasing compliance costs and delaying project
development.
China will remain an overarching risk generator in
metals markets, Fitch maintains. Chinese macroeconomic policy will
continue to attempt to cushion domestic industries from the effects of a
serious trade conflict with the US and a general slowing of the economy.
Although the US and China appear to be currently in a more conciliatory mode
regarding the trade war and there are some prospects of a trade deal, Fitch believes
a meaningful trade deal is unlikely to be reached before the next US
Presidential elections in late 2020.
Fitch forecasts that
Australia will spearhead the global as well as Asian miners’ race to utilise
technology in order to cut costs, enhance efficiency and increase mine safety
due to the country’s availability of strong network connectivity, power, highly
skilled labour and government support.
The mining landscape is in the age of technological
disruption today, where players are at the crossroads between a traditional
past and a transformative future that is sustainable.
Source: mining.com