Manila: Rapid economic growth in China and India will drive demand for minerals in both countries, which in turn will help sustain a mining boom in Southeast Asia, according to the findings of a report.
China could be the world’s second largest economy by 2030 and India the fourth largest, said a report by Citigroup Global Markets Asia Ltd, which was released at the seventh Asia Pacific Mining Conference in Manila on Thursday.
By 2050, China would be the world’s largest economy and India third, accounting together for perhaps 35% to 45% of the total global economic output, it said.
The two countries, the report added, had “been caught short” in their demand for mined commodities, particularly copper, nickel, zinc, iron ore and coking coal. By 2030, the two countries will need the equivalent of 150% of the world’s current copper and nickel supply. This would mean “massive increases in profitability and capital inflow to the (mining) sector”, the Citigroup report said.
Mining companies in the Association of Southeast Asian Nations (Asean), had reacted by increasing production even faster than those outside the region. From 2001 to 2007, Asean countries with large mining sectors had seen mining output grow faster than other parts of the economy.
“Asean mining economies are expecting positive growth from their mining activities,” the report said.
At the same time, the report voiced a word of caution. “The global environment looks likely to remain robust, but Asean must be proactive to promote its own mining growth,” it warned, citing studies that show that mineral resources in the Philippines and Indonesia are deeply underutilized.