base metals in indo
TRANSCRIPT
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EXECUTIVE SUMMARY
Indonesia - Base Metals 0103 - 2431 - 2010
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EXECUTIVE SUMMARY
Market value
The Indonesian base metals market grew by 27.2% in 2010 to reach a value of $9,160.2 million.
Market value forecast
In 2015, the Indonesian base metals market is forecast to have a value of $12,619.7 million, an increase
of 37.8% since 2010.
Market volume
The Indonesian base metals market shrank by 13.6% in 2010 to reach a volume of 977 thousand metric
ton.
Market volume forecast
In 2015, the Indonesian base metals market is forecast to have a volume of 857.7 thousand metric ton, adecrease of 12.2% since 2010.
Market segmentation I
Copper is the largest segment of the base metals market in Indonesia, accounting for 68.5% of the
market's total value.
Market segmentation II
Indonesia accounts for 18.9% of the Asia-Pacific base metals market value.
Market rivalry
The market is composed of a fairly small number of large companies, but they tend to operate in severalregions and have some diversification in their product portfolio; thereby minimizing competition.
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CONTENTS
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TABLE OF CONTENTS
EXECUTIVE SUMMARY 2
MARKET OVERVIEW 7
Market definition 7
Research highlights 8
Market analysis 9
MARKET VALUE 10
MARKET VOLUME 11
MARKET SEGMENTATION I 12
MARKET SEGMENTATION II 13
FIVE FORCES ANALYSIS 14
Summary 14
Buyer power 16
Supplier power 17
New entrants 18
Substitutes 19
Rivalry 20
LEADING COMPANIES 21
Newmont Mining Corporation 21
Rio Tinto 27
MARKET FORECASTS 31
Market value forecast 31
Market volume forecast 32
MACROECONOMIC INDICATORS 33
APPENDIX 35
Methodology 35
Related Datamonitor research 36
Disclaimer 37
ABOUT DATAMONITOR 38
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CONTENTS
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Premium Reports 38
Summary Reports 38
Datamonitor consulting 38
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CONTENTS
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LIST OF TABLES
Table 1: Indonesia base metals market value: $ million, 200610 10
Table 2: Indonesia base metals market volume: thousand metric ton, 200610 11
Table 3: Indonesia base metals market segmentation I:% share, by value, 2010 12
Table 4: Indonesia base metals market segmentation II: % share, by value, 2010 13
Table 5: Newmont Mining Corporation: key facts 21
Table 6: Newmont Mining Corporation: key financials ($) 24
Table 7: Newmont Mining Corporation: key financial ratios 25
Table 8: Rio Tinto: key facts 27
Table 9: Rio Tinto: key financials ($) 29
Table 10:
Rio Tinto: key financial ratios 29
Table 11: Indonesia base metals market value forecast: $ million, 201015 31
Table 12: Indonesia base metals market volume forecast: thousand metric ton, 201015 32
Table 13: Indonesia size of population (million), 200610 33
Table 14: Indonesia GDP (constant 2000 prices, $ billion), 200610 33
Table 15: Indonesia GDP (current prices, $ billion), 200610 33
Table 16: Indonesia inflation, 200610 34
Table 17: Indonesia consumer price index (absolute), 200610 34
Table 18: Indonesia exchange rate, 200610 34
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CONTENTS
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LIST OF FIGURES
Figure 1: Indonesia base metals market value: $ million, 200610 10
Figure 2: Indonesia base metals market volume: thousand metric ton, 200610 11
Figure 3: Indonesia base metals market segmentation I:% share, by value, 2010 12
Figure 4: Indonesia base metals market segmentation II: % share, by value, 2010 13
Figure 5: Forces driving competition in the base metals market in Indonesia, 2010 14
Figure 6: Drivers of buyer power in the base metals market in Indonesia, 2010 16
Figure 7: Drivers of supplier power in the base metals market in Indonesia, 2010 17
Figure 8: Factors influencing the likelihood of new entrants in the base metals market in
Indonesia, 2010 18
Figure 9: Factors influencing the threat of substitutes in the base metals market in Indonesia,
2010 19
Figure 10: Drivers of degree of rivalry in the base metals market in Indonesia, 2010 20
Figure 11: Newmont Mining Corporation: revenues & profitability 25
Figure 12: Newmont Mining Corporation: assets & liabilities 26
Figure 13: Rio Tinto: revenues & profitability 30
Figure 14: Rio Tinto: assets & liabilities 30
Figure 15: Indonesia base metals market value forecast: $ million, 201015 31
Figure 16: Indonesia base metals market volume forecast: thousand metric ton, 201015 32
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MARKET OVERVIEW
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MARKET OVERVIEW
Market definition
The base metals market consists of lead, zinc, copper, nickel, and tin. Volumes are annual mineproduction of each metal. Volumes are converted to values using annual average LME prices for each
metal. All currency conversions in this profile were calculated using constant 2010 average exchange
rate.
For the purposes of this report, Asia-Pacific comprises Australia, China, India, Indonesia, Japan, New
Zealand, Singapore, South Korea, Taiwan, and Thailand.
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MARKET OVERVIEW
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Research highlights
The Indonesian base metals industry had total revenues of $9.2 billion in 2010, representing a compound
annual rate of change (CARC) of -2.2% for the period spanning 2006-2010.
Industry production volumes decreased with a CARC of -1.9% between 2006 and 2010, to reach a total of
977 thousand metric tons in 2010.
The performance of the industry is forecast to accelerate, with an anticipated CAGR of 6.6% for the five-
year period 2010-2015, which is expected to drive the industry to a value of $12.6 billion by the end of
2015.
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MARKET OVERVIEW
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Market analysis
The Indonesian base metals industry is forecasted to accelerate in revenue growth and a continuing
decline in production volumes for 2010-2015.
Indonesia ranks among the worlds five largest producers of copper and nickel.
The Indonesian base metals industry had total revenues of $9.2 billion in 2010, representing a compound
annual rate of change (CARC) of -2.2% for the period spanning 2006-2010. In comparison, the Chinese
and Indian industry increased with a CAGR of 5% and 2.6%, over the same period, to reach respective
values of $23.5 billion and $2.1 billion in 2010.
Industry production volumes decreased with a CARC of -1.9% between 2006 and 2010, to reach a total of
977 thousand metric tons in 2010. The industry's volume is expected to decline to 857.7 thousand metric
tons by the end of 2015, representing a CARC of -2.6% for the 2010-2015 period.
Copper sales proved the most lucrative for the Indonesian base metals industry in 2010, with total
revenues of $6.3 billion, equivalent to 68.5% of the industry's overall value. In comparison, sales of nickelgenerated revenues of $1.7 billion in 2010, equating to 18.1% of the industry's aggregate revenues.
The performance of the industry is forecast to accelerate, with an anticipated CAGR of 6.6% for the five-
year period 2010-2015, which is expected to drive the industry to a value of $12.6 billion by the end of
2015. Comparatively, the Chinese and Indian industries will grow with CAGRs of 14% and 18.8%
respectively, over the same period, to reach respective values of $45.2 billion and $5 billion in 2015.
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MARKET VALUE
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MARKET VALUE
The Indonesian base metals market grew by 27.2% in 2010 to reach a value of $9,160.2 million.
The compound annual rate of change of the market in the period 200610 was -2.2%.
Table 1: Indonesia base metals market value: $ million, 200610
Year $ million IDR million million % Growth
2006 10,015.0 91,367,757.4 7,541.9
2007 15,202.6 138,695,365.5 11,448.6 51.8%
2008 10,231.3 93,341,808.7 7,704.9 (32.7%)
2009 7,203.2 65,715,478.5 5,424.5 (29.6%)
2010 9,160.2 83,569,730.2 6,898.2 27.2%
CAGR: 200610 (2.2%)
Source: Datamonitor D A T A M O N I T O R
Figure 1: Indonesia base metals market value: $ million, 200610
Source: Datamonitor D A T A M O N I T O R
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MARKET VOLUME
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MARKET VOLUME
The Indonesian base metals market shrank by 13.6% in 2010 to reach a volume of 977 thousand metric
ton.
The compound annual rate of change of the market in the period 200610 was -1.9%.
Table 2: Indonesia base metals market volume: thousand metric ton, 200610
Year thousand metric ton % Growth
2006 1,055.9
2007 1,092.0 3.4%
2008 921.2 (15.6%)
2009 1,130.4 22.7%
2010 977.0 (13.6%)
CAGR: 200610 (1.9%)
Source: Datamonitor D A T A M O N I T O R
Figure 2: Indonesia base metals market volume: thousand metric ton, 200610
Source: Datamonitor D A T A M O N I T O R
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MARKET SEGMENTATION I
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MARKET SEGMENTATION I
Copper is the largest segment of the base metals market in Indonesia, accounting for 68.5% of the
market's total value.
The nickel segment accounts for a further 18.1% of the market.
Table 3: Indonesia base metals market segmentation I:% share, by value, 2010
Category % Share
Copper 68.5%
Nickel 18.1%
Tin 13.3%
Total 100%
Source: Datamonitor D A T A M O N I T O R
Figure 3: Indonesia base metals market segmentation I:% share, by value, 2010
Source: Datamonitor D A T A M O N I T O R
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MARKET SEGMENTATION II
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MARKET SEGMENTATION II
Indonesia accounts for 18.9% of the Asia-Pacific base metals market value.
China accounts for a further 48.3% of the Asia-Pacific market.
Table 4: Indonesia base metals market segmentation II: % share, by value, 2010
Category % Share
China 48.3%
Australia 28.3%
Indonesia 18.9%
India 4.4%
Rest of Asia-Pacific 0.1%
Total 100%
Source: Datamonitor D A T A M O N I T O R
Figure 4: Indonesia base metals market segmentation II: % share, by value, 2010
Source: Datamonitor D A T A M O N I T O R
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FIVE FORCES ANALYSIS
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FIVE FORCES ANALYSIS
The base metals market will be analyzed taking metal mining and refining companies as players. The key
buyers will be taken as manufacturers of products such as copper cables and galvanized (zinc-coated)
steel, and energy suppliers and landowners will be taken as the key suppliers.
Summary
Figure 5: Forces driving competition in the base metals market in Indonesia, 2010
Source: Datamonitor D A T A M O N I T O R
The market is composed of a fairly small number of large companies, but they tend to operate in several
regions and have some diversification in their product portfolio; thereby minimizing competition. Buyer
power is limited by the large number and variety of buyers. Supplier power is strengthened by their own
diverse range of buyers which makes them less reliant on the revenues from this markets players.
However, backward vertical integration by some players into energy supply weakens supplier power (Rio
Tinto, for example, have their own hydropower generating facilities). Base metals are commodities and
their lack of differentiation strengthens buyer power. Successful players like Rio Tinto have differentiated
themselves by offering additional goods and services. Whilst little product differentiation might attract newentrants, high capital outlays and fixed costs could deter them, in addition to Indonesian mining laws.
There are high exit costs too, which increases rivalry amongst incumbents. However, diversification, in
terms of products and geographical markets, helps ameliorate competition in any given market.
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FIVE FORCES ANALYSIS
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Global metal prices are volatile and successful new entrants must have a robust business to survive slow
increases and downturns in prices. Improving global economic conditions have benefited commodity
prices; thereby improving the market and attracting new entrants and easing competition amongst
incumbents.
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FIVE FORCES ANALYSIS
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Buyer power
Figure 6: Drivers of buyer power in the base metals market in Indonesia, 2010
Source: Datamonitor D A T A M O N I T O R
Base metals have diverse applications. Just under half of global zinc consumption is for galvanized steel,
but it is also used in brass and other alloys; copper is used primarily for electrical applications such as
cables, but also has applications in pipes, and other products. Aluminum is used in aerospace,automotive, construction, and packaging applications. This diversity means that there are many potential
buyers, which weakens buyer power. There are, however, some large customers which exercise greater
financial power. All these metals are commodities, and the lack of differentiation strengthens buyer power.
However, leading players may differentiate themselves by offering additional goods and services, such as
fabricated products, or chemicals made from their metals (e.g. copper sulfate). This is true of Rio Tinto
which offers chemicals such as borate as by-products of its operations. Companies buying base metals
generally do so because these commodities are very important to their own operations; further weakening
buyer power. Buyer power can also be weakened by the use of long-term supply contracts, which
imposes switching costs on buyers. Overall, buyer power is moderate. However, it should be noted that
the relationship between a players revenue and global metal prices, which is largely outside its control,means that buyer power in practice may be rather stronger than this analysis indicates.
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FIVE FORCES ANALYSIS
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Supplier power
Figure 7: Drivers of supplier power in the base metals market in Indonesia, 2010
Source: Datamonitor D A T A M O N I T O R
Base metal companies view their ore reserves as key assets, and gaining access to land where they can
establish mining operations is vital. This may involve negotiating with private landowners or government
agencies. It is common for mining companies to pay royalties on their production: this is analogous to thecost of sales, as it is usually calculated as a percentage of the companys metal revenues or production.
Raw material differentiation is significant in this context. Higher quality reserves (e.g. ores with higher
content of the metal of interest) should offer a better return on the costs of mining and refining; lower
quality ore, or a mine location that is difficult to develop, would give a smaller return. Deciding on whether
it is economical to acquire and exploit a new reserve may depend on current and future metal prices,
which means that supplier power can also vary. Mining and smelting is energy-intensive, and market
players may have long-term supply contracts with suppliers of electrical power or fuels. Typically, these
suppliers will be large companies, and a market player may not always be able to choose its utility
supplier. However, it may be possible to reduce dependence on these powerful suppliers through auto-
generation of electricity, i.e. backwards vertical integration. Overall, supplier power is strong.
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FIVE FORCES ANALYSIS
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New entrants
Figure 8: Factors influencing the likelihood of new entrants in the base metals market in
Indonesia, 2010
Source: Datamonitor D A T A M O N I T O R
There are relatively high barriers to entry to the base metals market. A new company needs enough
capital to acquire mining rights, establish mines, smelters, transportation links, and so on. Alternatively, acompany operating in a different business area might enter the market through acquisition of a base
metals player, but this is also likely to be costly. Indonesian market growth was strong up till decline in
2008 which continued into 2009. This trend was reversed, however, in 2010 and the compound annual
growth rate (CAGR) for 2010-2015 is forecast to be 6.6 per cent. This could encourage new players. In
addition, commodity prices have been steadily rising since March 2009 with the improvement in the global
economy. However, global metal prices can be volatile. They reflect multiple factors, such as reserves,
supply, demand from several end-user sectors, and commodity investment activities (including
speculation). Successful new entrants must have a business robust enough to survive slower increases
and downturns in prices. Government regulation also inhibits market entry. New mining laws recently
passed in Indonesia favor small and medium sized companies as local governments have greater controlover the nations abundant resources, these conditions will discourage foreign investors already wary
about legal uncertainties and could discourage new (foreign) entrants. Overall, the likelihood of new
entrants is moderate.
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FIVE FORCES ANALYSIS
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Substitutes
Figure 9: Factors influencing the threat of substitutes in the base metals market in Indonesia,
2010
Source: Datamonitor D A T A M O N I T O R
Substitutes vary from one metal to another. In some cases, one base metal can substitute for another.
For example, copper and aluminum both find application in electrical cable manufacturing. Buyers ofeither metal for data communication cable applications might respond to excessive price rises by shifting
production towards the other metal, or towards fiber optic cables made from plastics. However, in general,
buyers are seeking the particular chemical and physical properties that only these metals have. For
example, brass is defined as an alloy of copper and zinc, and so a brass mill cannot avoid using these
metals in its operations. Overall, the threat of substitutes is weak.
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FIVE FORCES ANALYSIS
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Rivalry
Figure 10: Drivers of degree of rivalry in the base metals market in Indonesia, 2010
Source: Datamonitor D A T A M O N I T O R
The Indonesian market is quite fragmented, although concentration within certain segments is higher.
Recent mergers and acquisitions in this market, such as Rio Tintos acquisition of Alcan and Freeport-
McMoRans acquisition of Phelps Dodge (both in 2007) have consolidated the market, reducing thenumber of players but increasing their size. Rivalry was increased when the market fell into decline in
2008 and 2009. However, this trend was reversed in 2010 with very strong market growth rates and is set
to grow with a CAGR of 6.6% between 2010 and 2015, which, coupled with improving commodity prices,
should ease competition. Exit costs are high as a company leaving the market will need to dispose of
mines, smelters, and similarly costly and highly industry-specific assets. This compels players to remain
in competition, even when fighting for a share of a decelerating or diminishing global market, and will
boost rivalry. Leading companies such as Rio Tinto have diversified into several commodity metals, and
integrated vertically forwards to provide chemicals like borate. These strategies should provide some
protection against the fluctuations of the base metal market itself. Overall, rivalry is strong.
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LEADING COMPANIES
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LEADING COMPANIES
Newmont Mining Corporation
Table 5: Newmont Mining Corporation: key facts
Head office: 6363 South Fiddler's Green Circle, Greenwood Village, Denver,Colorado 80111, USA
Telephone: 1 303 863 7414
Fax: 1 303 837 5837
Local office: Newmont Nusa Tenggara, PT, 258 Jl. Sriwijaya, Mataram, WestNusa Tenggara 83126, IDN
Telephone: 62 3 72 635 318
Fax: 62 3 72 635 318
Website: www.newmont.com
Financial year-end: DecemberTicker: NEM
Stock exchange: New York
Source: company website D A T A M O N I T O R
Newmont Mining Corporation (Newmont) is a producer of gold and copper. The company has assets and
operations in the US, Australia, Peru, Indonesia, Ghana, Canada, New Zealand, and Mexico. As of
December 2009, the latest date for which information is available, Newmont had proven and probable
gold reserves of 91.8 million equity ounces and an aggregate land position of approximately 33,400square miles (86,500 square kilometers). Its proven and probable copper reserves were 9,100 million
equity pounds.
The company primarily operates in a single industry, namely exploration for and production of gold.
Newmont is also engaged in the production of copper, principally through its Batu Hijau operation in
Indonesia and Boddington operation in Australia.
Newmont operates through four segments, namely, North America, South America, Asia-Pacific, and
Africa.
The company's North America segment consists primarily of Nevada, La Herradura in Mexico, and HopeBay in Canada.
The Nevada operations of the company produce gold from a variety of ore types requiring different
processing techniques depending on economic and metallurgical characteristics.
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LEADING COMPANIES
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The company's operations in Nevada include the following: Carlin, located west of the city of Elko on the
geologic feature known as the Carlin Trend; the Phoenix mine, located 10 miles south of Battle Mountain;
the Twin Creeks mine, located approximately 15 miles north of Golconda; and the Midas mine near the
town of the same name. The company also has 25% interest in the Turquoise Ridge joint venture with a
subsidiary of Barrick Gold Corporation (Barrick), which utilizes mill capacity at Twin Creeks.
Newmont's Nevada operations has sales and refining agreements with Gerald Metals, Penoles, Johnson
Matthey, Just Refiners, and Glencore to process intermediate gold-bearing product.
Gold sales from Nevada totaled approximately 2.0 million ounces for FY2009 with ore mined from eight
open pit and six underground mines. At December 31, 2009, the company reported 28.5 million equity
ounces of gold reserves in Nevada, with 84% of those ounces in open pit mines and 16% in underground
mines.
In Mexico, Newmont has a 44% interest in La Herradura, which is located in Mexico's Sonora desert. LaHerradura is operated by Fresnillo (which owns the remaining 56% interest) and comprises open pit
operations with run-of-mine heap leach processing. La Herradura sold 112,500 ounces of gold
attributable to Newmont in FY2009 and at December 31, 2009 Newmont reported 1.8 million equity
ounces of gold reserves at La Herradura. La Herradura is currently developing two new deposits, Soledad
and Dipolos.
In Canada, Newmont owns 100% of the Hope Bay project, a large undeveloped gold project in the
Nunavut Territory of Canada. Since acquiring this property in 2008, Newmont has made significant
infrastructure improvements and identified an additional 45 new drilling targets. The company is currently
evaluating an underground operation to advance production.
The company's South America segment consists primarily of Minera Yanacocha (Yanacocha) and Conga
in Peru.
The Yanacocha operation has mining rights with respect to a large land position consisting of
concessions granted by the Peruvian government to Yanacocha and a related entity. It currently has three
active open pit mines: Cerro Yanacocha, La Quinua, and Chaquicocha. The properties of Yanacocha are
located approximately 375 miles north of Lima and 30 miles north of the city of Cajamarca, in Peru. The
company holds a 51.35% interest in Yanacocha with the remaining interests held by Compania de Minas
Buenaventura (43.65%) and the International Finance Corporation (5%). In addition, reclamation and/or
backfilling activities at Carachugo, San Jose, and Maqui are currently underway. Further, Yanacocha hasfour leach pads, three processing facilities, and one mill. The Yanacocha operations contain the Conga
deposit.
Yanacocha's gold sales for FY2009 totaled 2.1 million ounces (1.1 million equity ounces) and at
December 31, 2009, Newmont reported 5.4 million equity ounces of gold reserves at Yanacocha.
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LEADING COMPANIES
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The Conga project (51.35% owned by Newmont) is located within close proximity of existing operations at
Yanacocha. Feasibility studies on Newmont's preferred development option were completed in FY2009
and a construction decision is expected in the fourth quarter of FY2010 assuming government approval.
The project is progressing into the development stage with production expected in 2014-15. At December
31, 2009, Newmont reported 6.1 million equity ounces of gold reserves and 1,660 million equity pounds of
copper reserves at Conga.
The company's Asia-Pacific segment consists primarily of Batu Hijau in Indonesia, Boddington in
Australia, and other smaller operations in Australia/New Zealand.
Batu Hijau is a large porphyry copper/gold deposit which Newmont discovered in 1990. It is located on the
island of Sumbawa, east of Jakarta. The company owns 35.44% of the Batu Hijau mine through the Nusa
Tenggara Partnership (NTP) with an affiliate of Sumitomo Corporation of Japan. In FY2009, copper sales
were 497.7 million pounds (217.0 million equity pounds), while gold sales were 550,500 ounces (239,700
equity ounces). At December 31, 2009, Newmont reported 4,520 million equity pounds of copper reservesand 4.5 million equity ounces of gold reserves at Batu Hijau.
In Australia, Newmont wholly owns Boddington, which is located 81 miles southeast of Perth in Western
Australia. Boddington commenced commercial production in November 2009. Boddington sold 103,300
ounces of gold, including 8,200 incremental start-up ounces, and 9.0 million pounds of copper in FY2009.
At December 31, 2009, Newmont reported 21.0 million equity gold ounces and 2,040 million equity
copper pounds of reserves at Boddington.
Besides Boddington, in Australia/New Zealand, Newmont has its operations at Jundee, Tanami, Kalgoorli,
and Waihi.
Newmont wholly owns Jundee, which is situated approximately 435 miles northeast of Perth in Western
Australia. In FY2009, Jundee sold 412,300 ounces of gold and at December 31, 2009, Newmont reported
1.2 million equity ounces of gold reserves at Jundee.
Newmont wholly owns Tanami that includes the Granites treatment plant and associated mining
operations, which are located in the Northern Territory approximately 342 miles northwest of Alice
Springs, and the Dead Bullock Soak mining operations, approximately 25 miles west of the Granites.
During FY2009, the Tanami operations sold 290,900 ounces of gold and at December 31, 2009 Newmont
reported 1.6 million equity ounces of gold reserves at Tanami.
Newmont has 50% ownership in Kalgoorlie, which comprises the Fimiston open pit (commonly referred to
as the Super Pit) and Mt. Charlotte underground mine at Kalgoorlie-Boulder, 373 miles east of Perth in
Western Australia. The mines are managed by Kalgoorlie Consolidated Gold Mines for the joint venture
owners, Newmont and Barrick. The Super Pit is one of Australia's largest gold mines in terms of gold
production and annual mining volume.
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LEADING COMPANIES
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During FY2009, the Kalgoorlie operations sold 335,800 equity ounces of gold and at December 31, 2009
Newmont reported 4.2 million equity ounces of gold reserves at Kalgoorlie.
Newmont wholly owns Waihi, which is located within the town of Waihi, approximately 68 miles southeast
of Auckland, New Zealand. It consists of the Favona underground deposit and the Martha open pit. The
Waihi operation sold 118,200 ounces of gold in FY2009 and at December 31, 2009 Newmont reported
0.4 million equity ounces of gold reserves at Waihi.
The company's Africa segment consists primarily of its operations in Ahafo and Akyem in Ghana.
Newmont wholly owns its Ahafo operation, which is located in the Brong-Ahafo Region of Ghana,
approximately 180 miles northwest of Accra. Newmont operates three open pits at Ahafo with reserves
contained in 17 pits. Development of a fourth pit is underway and production is expected to begin in
FY2010. The process plant consists of a conventional mill and carbon-in-leach circuit. Ahafo sold 546,400
ounces of gold in FY2009 and at December 31, 2009, Newmont reported 9.1 million equity ounces of goldreserves at Ahafo.
Newmont wholly owns Akyem, which is located approximately 80 miles northwest of Accra. Newmont has
received the environmental permit and the mining lease for Akyem and it is advancing the project towards
a development decision, which could result in production in 2013-14. At December 31 2009, the company
reported 7.7 million equity ounces of gold reserves at Akyem.
Key Metrics
The company recorded revenues of $7,705 million in the fiscal year ending December 2009, an increase
of 24.3% compared to fiscal 2008. Its net income was $1,297 million in fiscal 2009, compared to a netincome of $853 million in the preceding year.
Table 6: Newmont Mining Corporation: key financials ($)
$ million 2005 2006 2007 2008 2009
Revenues 4,352.0 4,987.0 5,526.0 6,199.0 7,705.0
Net income (loss) 322.0 791.0 (1,886.0) 853.0 1,297.0
Total assets 13,992.0 15,601.0 15,598.0 15,839.0 22,299.0
Total liabilities 4,685.0 5,166.0 8,050.0 8,737.0 11,596.0
Source: company filings D A T A M O N I T O R
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LEADING COMPANIES
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Table 7: Newmont Mining Corporation: key financial ratios
Ratio 2005 2006 2007 2008 2009
Profit margin 7.4% 15.9% (34.1%) 13.8% 16.8%Revenue growth 0.6% 14.6% 10.8% 12.2% 24.3%
Asset growth 9.6% 11.5% 0.0% 1.5% 40.8%
Liabilities growth 15.5% 10.3% 55.8% 8.5% 32.7%
Debt/asset ratio 33.5% 33.1% 51.6% 55.2% 52.0%
Return on assets 2.4% 5.3% (12.1%) 5.4% 6.8%
Source: company filings D A T A M O N I T O R
Figure 11: Newmont Mining Corporation: revenues & profitability
Source: company filings D A T A M O N I T O R
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LEADING COMPANIES
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Figure 12: Newmont Mining Corporation: assets & liabilities
Source: company filings D A T A M O N I T O R
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LEADING COMPANIES
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Rio Tinto
Table 8: Rio Tinto: key facts
Head office: 2 Eastbourne Terrace, London, W2 6LG, GBR
Telephone: 44 20 7781 2000
Fax: 44 20 7781 1800
Local office: Rio Tinto Indonesia, PT, Menara Anugrah 15th Floor, Jl. MegaKuningan Lot. 8.6-8.7, Kantor Taman E.3.3, Kuningan Timur, SetiaBudi, Jakarta, Jakarta 12950, IDN
Telephone: 62 2 1576 4551
Fax: 62 2 1579 41884
Website: www.riotinto.com
Financial year-end: December
Ticker: RTP, RIO, RIO
Stock exchange: New York, London, Sydney
Source: company website D A T A M O N I T O R
Rio Tinto plc and Rio Tinto Limited (collectively known as Rio Tinto), operate as a single business
organization that is engaged in international mining. This encompasses exploring for, mining, and
processing the earth's mineral resources. The group offers products which include aluminum, copper,
diamonds, energy products (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, and
talc), and iron ore. The group has global operations with significant businesses in Australia, North
America, South America, Asia, Europe, and South Africa.
Rio Tinto operates through six business groups: aluminum; copper; diamonds and minerals; energy; iron
ore; and other operations.
Rio Tinto's aluminum group operates through the wholly-owned, integrated aluminum subsidiary, Rio
Tinto Alcan. Rio Tinto Alcan is one of the world's largest producers of bauxite, alumina, and aluminum.
Rio Tinto Alcan provides bauxite, alumina, specialty aluminas, and aluminum products.
Rio Tinto's copper group is one of the largest producers of copper, and valuable byproducts. It has a
diverse mix of operations and projects located in North and South America, Africa, Asia, and Australia.
The group offers copper, gold, molybdenum, silver, and nickel.
The diamonds and minerals group comprises Rio Tinto Diamonds (RTD), Rio Tinto Minerals (RTM), and
Rio Tinto Iron & Titanium (RTIT). RTD accounts for about 6% of the world's production of rough diamonds
by value.
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LEADING COMPANIES
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RTM is a global leader in borates and talc supply and RTIT is a market leader in titanium dioxide
feedstock, used in the manufacture of pigments for paints and plastics. The segment provides diamonds,
borates, titanium dioxide feedstocks, talc, high purity iron, metal powders, zircon, and rutile products.
The energy business group is one of the biggest suppliers of thermal and coking coal to the Asian
seaborne market and is the largest uranium producer supplying uranium oxide to electric power utilities
worldwide. Rio Tinto Coal Australia manages eight coal mines in Queensland and New South Wales. In
the US, the group operates the Colowyo coal mine and has a 48 % interest in Cloud Peak Energy.
Rio Tinto's iron ore group wholly owns Hamersley Iron mines, and Corumba mine in Brazil. Hamersley
Iron operates nine mines including one mine in joint venture. It also includes the Dampier Salt operations
at three sites in Western Australia. Rio Tinto has 53% interest in Robe River mines in Australia and 59%
interest in Iron Ore Company of Canada. The company has 95% interest in the Simandou iron ore project
in Guinea and 51% interest in a joint venture with the state owned Orissa Mining Corporation to develop
its iron ore leases in Orissa (India). The group also has 60% interest in the HIsmelt direct iron makingplant in Australia.
The other operations business group of Rio Tinto comprises its exploration, and technology and
innovation business groups.
The exploration group is organized into five geographically based teams in North America, South
America, Australia, Asia, and Africa/Europe; and a sixth project generation team that searches the world
for new opportunities and provides geological, geophysical, and commercial expertise to the regional
teams.
The technology and innovation group has bases in Australia, Canada, the UK, and the US. Its role is to
identify and promote best operational technology practice across the group and to pursue step change
innovation of strategic importance to ore bodies of the future.
Key Metrics
The company recorded revenues of $41,825 million in the fiscal year ending December 2009, a decrease
of 22.9% compared to fiscal 2008. Its net income was $5,335 million in fiscal 2009, compared to a net
income of $4,609 million in the preceding year.
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LEADING COMPANIES
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Table 9: Rio Tinto: key financials ($)
$ million 2005 2006 2007 2008 2009
Revenues 19,033.0 22,465.0 29,700.0 54,264.0 41,825.0Net income (loss) 5,215.0 7,867.0 7,746.0 4,609.0 5,335.0
Total assets 29,803.0 34,494.0 101,091.0 89,616.0 97,236.0
Total liabilities 14,064.0 15,109.0 75,067.0 67,155.0 51,311.0
Employees 32,000 35,000 51,677 54,264 56,894
Source: company filings D A T A M O N I T O R
Table 10: Rio Tinto: key financial ratios
Ratio 2005 2006 2007 2008 2009Profit margin 27.4% 35.0% 26.1% 8.5% 12.8%
Revenue growth 67.8% 18.0% 32.2% 82.7% (22.9%)
Asset growth 13.3% 15.7% 193.1% (11.4%) 8.5%
Liabilities growth 2.5% 7.4% 396.8% (10.5%) (23.6%)
Debt/asset ratio 47.2% 43.8% 74.3% 74.9% 52.8%
Return on assets 18.6% 24.5% 11.4% 4.8% 5.7%
Revenue per employee $594,781 $641,857 $574,724 $1,000,000 $735,139
Profit per employee $162,969 $224,771 $149,893 $84,937 $93,771
Source: company filings D A T A M O N I T O R
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LEADING COMPANIES
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Figure 13: Rio Tinto: revenues & profitability
Source: company filings D A T A M O N I T O R
Figure 14: Rio Tinto: assets & liabilities
Source: company filings D A T A M O N I T O R
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MARKET FORECASTS
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MARKET FORECASTS
Market value forecast
In 2015, the Indonesian base metals market is forecast to have a value of $12,619.7 million, an increaseof 37.8% since 2010.
The compound annual growth rate of the market in the period 201015 is predicted to be 6.6%.
Table 11: Indonesia base metals market value forecast: $ million, 201015
Year $ million IDR million million % Growth
2010 9,160.2 83,569,730.2 6,898.2 27.2%
2011 8,982.2 81,945,851.0 6,764.2 (1.9%)
2012 9,028.7 82,369,891.6 6,799.2 0.5%
2013 10,444.3 95,284,571.2 7,865.2 15.7%
2014 11,326.1 103,329,178.9 8,529.3 8.4%
2015 12,619.7 115,130,979.6 9,503.5 11.4%
CAGR: 201015 6.6%
Source: Datamonitor D A T A M O N I T O R
Figure 15: Indonesia base metals market value forecast: $ million, 201015
Source: Datamonitor D A T A M O N I T O R
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MARKET FORECASTS
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Market volume forecast
In 2015, the Indonesian base metals market is forecast to have a volume of 857.7 thousand metric ton, a
decrease of 12.2% since 2010.
The compound annual rate of change of the market in the period 201015 is predicted to be -2.6%.
Table 12: Indonesia base metals market volume forecast: thousand metric ton, 201015
Year thousand metric ton % Growth
2010 977.0 (13.6%)
2011 785.0 (19.7%)
2012 829.8 5.7%
2013 831.9 0.3%
2014 837.3 0.6%
2015 857.72.4%
CAGR: 201015 (2.6%)
Source: Datamonitor D A T A M O N I T O R
Figure 16: Indonesia base metals market volume forecast: thousand metric ton, 201015
Source: Datamonitor D A T A M O N I T O R
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MACROECONOMIC INDICATORS
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MACROECONOMIC INDICATORS
Table 13: Indonesia size of population (million), 200610
Year Population (million) % Growth
2006 231.8 1.3%
2007 234.7 1.2%
2008 237.5 1.2%
2009 240.3 1.2%
2010 243.0 1.1%
Source: Datamonitor D A T A M O N I T O R
Table 14: Indonesia GDP (constant 2000 prices, $ billion), 200610
Year Constant 2000 Prices, $ billion % Growth
2006 220.4 5.5%
2007 234.3 6.3%
2008 248.4 6.0%
2009 259.5 4.5%
2010 275.0 6.0%
Source: Datamonitor D A T A M O N I T O R
Table 15: Indonesia GDP (current prices, $ billion), 200610
Year Current Prices, $ billion % Growth
2006 356.4 26.4%
2007 404.2 13.4%
2008 445.1 10.1%
2009 452.6 1.7%
2010 504.0 11.4%
Source: Datamonitor D A T A M O N I T O R
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MACROECONOMIC INDICATORS
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Table 16: Indonesia inflation, 200610
Year Inflation Rate (%)
2006 13.1%2007 6.4%
2008 10.0%
2009 4.6%
2010 5.1%
Source: Datamonitor D A T A M O N I T O R
Table 17: Indonesia consumer price index (absolute), 200610
Year Consumer Price Index (2000 =100)
% Growth
2006 176.5 13.1%
2007 187.8 6.4%
2008 206.6 10.0%
2009 216.1 4.6%
2010 227.1 5.1%
Source: Datamonitor D A T A M O N I T O R
Table 18: Indonesia exchange rate, 200610
Year Exchange rate ($/IDR) Exchange rate (/IDR)
2006 9,183.7726 11,522.4929
2007 9,138.5019 12,504.4497
2008 9,684.8890 14,171.4184
2009 10,428.8831 14,501.4783
2010 9,123.1312 12,114.6419
Source: Datamonitor D A T A M O N I T O R
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APPENDIX
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APPENDIX
Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated,analyzed, cross-checked and presented in a consistent and accessible style.
Review of in-house databases Created using 250,000+ industry interviews and consumer surveys
and supported by analysis from industry experts using highly complex modeling & forecasting tools,
Datamonitors in-house databases provide the foundation for all related industry profiles
Preparatory research We also maintain extensive in-house databases of news, analyst
commentary, company profiles and macroeconomic & demographic information, which enable our
researchers to build an accurate market overview
Definitions Market definitions are standardized to allow comparison from country to country. The
parameters of each definition are carefully reviewed at the start of the research process to ensure they
match the requirements of both the market and our clients
Extensive secondary research activities ensure we are always fully up-to-date with the latest
industry events and trends
Datamonitor aggregates and analyzes a number of secondary information sources, including:
- National/Governmental statistics
- International data (official international sources)
- National and International trade associations
- Broker and analyst reports
- Company Annual Reports
- Business information libraries and databases
Modeling & forecasting tools Datamonitor has developed powerful tools that allow quantitative
and qualitative data to be combined with related macroeconomic and demographic drivers to create
market models and forecasts, which can then be refined according to specific competitive, regulatory
and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused, accurate and
up-to-date
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APPENDIX
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Related Datamonitor research
Industry Profile
Base Metals in Europe
Base Metals in Asia-Pacific
Base Metals in Canada
Base Metals in the US
Base Metals in China
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APPENDIX
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Disclaimer
All Rights Reserved.
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form
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permission of the publisher, Datamonitor plc.
The facts of this report are believed to be correct at the time of publication but cannot be guaranteed.
Please note that the findings, conclusions and recommendations that Datamonitor delivers will be
based on information gathered in good faith from both primary and secondary sources, whose
accuracy we are not always in a position to guarantee. As such Datamonitor can accept no liability
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