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Project Spending Forecast based on CF - $7,874.45 million Overview For the North American Metals & Minerals Industry, 2006 will be remembered as a banner year for industrial project construction starts, due to a two-year strong economy, an upswing in worldwide demand for raw materials and construction materials, especially from countries like China, and generally rising commodity prices for everything from gold to copper to cement. These issues kept pressure on supply, driving capacity expansions, and in some cases, new plant construction. Planning for new capacity is really still ongoing in most sectors, while some sectors like steel, cement and gypsum wallboard have started implementing expansion plans. Other sector expansion plans, like those for coal and uranium mining, will take longer to consummate. A larger than normal amount of big ticket grassroot plant and expansion projects across all sectors led by mining, cement and steel have been announced during the past year and a half, with construction starts stretching out to 2010. A large majority of these projects are currently targeted for 2007 construction starts. This bodes well for project spending in 2007, but some indicators, such as new housing starts, are pointing to a slowdown in the economy, which will have an impact on industry spending, and the industry could see an increase in project cancellations and deferrals in 2007.
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Another constraint for the industry is that during the current surge in industrial construction, shortages of construction equipment and qualified labor services are causing delays in construction timetables of some projects. For example, world gold mining leader, Newmont Mining, had problems finding qualified miners and laborers to work on its expansion projects in Nevada, leading to startup delays. A recent announcement from a drilling rig fabricator stating that it was bringing in more than 400 welders from India to make up for the lack of qualified welders on the Gulf Coast is a good example of the problems industrial projects are facing. Shortages of heavy lifting cranes affected construction jobs across the country. Industrial Info is forecasting –1.5% growth in project spending for 2007 for the Metals & Minerals Industry as growth tapers off, however, spending levels will remain at a historically high annual level. Currently, there are 445 projects under development in North America with a total investment value (TIV) of $15.7 billion scheduled to begin construction in 2007. When compared to equivalent numbers for 2006, there were 418 projects totaling $10.6 billion. That is a 6% increase in planned project starts and a 48% increase in TIV for 2007. Steel Manufacturing Approaching the end of 2006, project activity at U.S. steel manufacturers reached highs not seen in years, as a number of large-scale steel mill projects were announced by companies such as ThyssenKrupp, Nucor, and Ipsco, to name a few, in order to take advantage of the booming U.S. market for steel sheet, SBQ and tubing. Industrial Info is tracking close to 200 active capital and maintenance projects for the U.S. steel mill sector worth close to $9 billion. This is more than double the amount that was being tracked at the end of 2005. An example of the improving outlook for the North American market is German steel firm, ThyssenKrupp AG (Dusseldorf, Germany), which recently approved $50 million to perform a feasibility study for a new $2.9 billion carbon and stainless steel mill complex in the southern U.S. Very much interested in the North American steel market, ThyssenKrupp’s first priority is acquiring Canadian integrated steel producer, Dofasco (Hamilton, Ontario). If the Dofasco deal falls through then a grassroot mill complex has a better chance of moving forward. ThyssenKrupp is developing an integrated steel mill in Brazil to produce low cost steel slabs, which would be the feedstock for a carbon rolling mill in North America. Prior to this year's spurt in grassroot steel mill development, the industry was experiencing stronger than usual capital and maintenance activity for the past two years. This coming after years of bankruptcy, consolidation, and poor market conditions that sent many steel manufacturers running for cover. Today, a leaner, meaner industry is capitalizing on the recent strong demand situation. Internationally, consolidation of the steel industry is continuing with mega-mergers. Take for example the recent mega-merger between the number one steel company, Mittal, and the number two steel company, Arcelor, creating a global mega-steel producer. A slew of recent project announcements has highlighted the southern U.S. as the region of choice for the next wave of steel mill construction in the U.S. Steel demand from automotive, and oil & gas industries is driving this trend. In addition to ThyssenKrupp, Nucor, Ipsco, Berg Steel, and Steel Dynamics are all in the preliminary developmental stages to construct new grassroot mills in the southern U.S. Start-up steel firm, SeverCorr, LLC is well underway with construction of a new $800 million hot rolled sheet mill in Mississippi, which is targeting automotive end users. SeverCorr is contemplating an expansion, which would double capacity of the new mill that is scheduled to begin operations by the end of 2007. Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina) has been on a major project development binge as of late. It seems as soon as one major project is announced another one shows up right behind it. Currently, Nucor is developing more than $1.1 billion in planned capital and maintenance projects in the U.S. This money will be spread across 36 projects at Nucor's existing steel mills as well as for new grassroot construction. These projects are scheduled to begin construction in 2006 through 2008. Major projects include a grassroot SBQ steel mill at an undetermined location in the south, a major melt shop expansion, a hot dip galvanizing line addition, a new Castrip mill, and vacuum degaser additions. Smaller projects planned include annual mill maintenance shutdowns and plant upgrades. Nucor is also involved in a program to shore up alternatives to scrap steel, which the company relies heavily upon at its many recycled steel mills. Demand for scrap steel is up worldwide and prices have been volatile. Nucor is currently commissioning a new $225 million Midrex Direct Reduced Iron (DRI) plant in Point Lisas, Trinidad. Nucor relocated a major portion of the new plant from Louisiana last year. In addition, Nucor has long-term plans to construct alternative iron facilities for DRI and HIsmelt at its steel mills in the U.S. Mining The North American mining industry experienced increased project announcements during the first half of 2006, which tapered off somewhat during the later half of the year. However, planned mining project construction starts for 2007 are at a record high as domestic and worldwide demand for raw materials, as well as record increases in commodity prices, are driving this activity. Leading mining sectors for 2007 include oil sands, coal, copper, and precious metals, all with significant activity. One example is privately-owned Cline Resource & Development Company (Beckley, West Virginia), which is developing three coal mines in Illinois that if constructed, will produce a combined total of about 28 million tons per year, almost doubling current state production figures. Total cost to build the three mines will exceed $700 million. Construction is well underway on the first mine in Williamson County, Illinois. The Pond Creek No. 1 mine is located east of Johnston City, Illinois. The mine will produce 7 million tons per year and will be operated by Cline Resource subsidiary Mach Mining, LLC. Construction of a rail spur to the site is complete and construction of the prep plant is underway. The company plans to begin mining operations by the fourth quarter of 2006 and ramp up to the full 7 million tons a year capacity within a year. In Montgomery County, Cline Resource’s subsidiary, Colt, LLC, is developing a 7 million-ton per year underground coal mine. The company plans to submit the mine permit by the end of 2006. The siting of a longwall mine in the county is receiving opposition from anti-longwall mining groups, which could jeopardize the development. A third mine, being developed by Cline Resource’s subsidiary, Sugar Camp Energy, LLC, is envisioned as a 14 million-ton per year mine with two longwall mining machines. Permitting is underway for the project. If built, the mine will be the largest underground coal mine in the U.S. Construction of this mine could start in 2007, if mine permits are received by late 2006. Production start-up is estimated for 2009. Cline Resource is developing integrated gasification combined cycle (IGCC) coal-fired mine-mouth power projects at the Williamson and Montgomery county mine sites, which if constructed will cost an additional $2 billion, increasing the amount of investment for the three mines plus the power plants to about $2.7 billion. The success of the coal mines is not tied directly to the construction of the IGCC plants, as growing regional demand for coal is leading to new mines being constructed. There’s a lot of excitement in the coal industry. Project planning continues to grow for coal mining companies like Peabody Energy, Arch Coal, CONSOL, and Alliance Resource Partners that continue to invest in new coal reserves, development of new mining complexes, and expansion of existing mines. A number of mega-coal mining projects were announced in 2006 with projected construction starts in 2007. These large-scale projects have heavy coal handling and prep plant requirements. Most of these projects are large new mines or major expansions of existing mines. Don’t expect coal mine development to peak any time soon since 2007 is shaping up to be a big year for major grassroot coal mine construction starts with fifteen grassroot mines planned with a TIV of $2.1 billion. And there’s an additional $700 million worth of coal mines planned for 2008. Industrial Info is forecasting this growth trend continuing for at least the next two to three years, as long as demand stays strong and the government continues to focus on clean coal R&D and major technology genesis projects like FutureGen. It’s not surprising to see that the top coal producing state, Wyoming, is the top state for future coal mine development. Wyoming’s low sulfur coal from the Powder River Basin is in great demand across the nation. Wyoming has eight coal mining projects with a TIV of $906 million planned. What is surprising is the record development in the Eastern basins of Appalachian and Illinois, which has surpassed western coal development, especially for high sulfur coal development. High sulfur coal from the Appalachian, Central, and Illinois Basins is becoming feasible again as more and more coal-fired power plants bring flue gas desulfurization scrubbers online. This is driving an increasing amount of development in Pennsylvania, West Virginia, Illinois and Kentucky, capping off the top five states for coal mining project development. Pennsylvania, for example, has five planned projects worth a total of $713 million. Newmont Mining Corporation (NYSE:NEM) (Denver, Colorado) finished two major gold mining projects in 2006 and is moving forward with others. The company’s newest mine, Leeville, located north of Carlin, Nevada, has already begun production. Initial construction began on the $205 million Leeville underground mine in 2002. The company also started up its Phoenix Gold Mine project in 2006. Construction and labor shortages caused delays on both of these projects. After Phoenix and Leeville, the next big project for Newmont will be the Emigrant open pit project. Permitting will likely delay the project construction start until 2007. Emigrant will be an open pit gold mine with oxide heap leaching. Some of the facilities of the nearby closed Rain mine will be used. Newmont Mining is building a new 200-megawatt coal-fired power plant to supply electricity to the company’s Nevada mining operations. Cement Manufacturing North American cement producers are clamoring to increase capacity in the wake of record nationwide cement demand. Most producers will be spending money in 2007 to improve plant efficiency and expand capacity. Increased manufacturing capacity will come in the form of new grassroot plants, modernizations and replacement of antiquated kiln lines with new technologies. Right now, Industrial Info is tracking more than $4.5 billion in capital and maintenance spending for the North American cement manufacturing sector in 2007. Foreign producers like Votorantim, Holcim, and Italcementi, as well as homegrown producers like Eagle Materials and Ash Grove Cement, are a few of the companies planning major expansion programs in North America. Equipment and service providers, such as engineering and construction firms, as well as equipment suppliers with experience in kiln technologies, bulk cement storage and handling systems, conveyors, emission controls, and dust collection, will be in strong demand for at least the next two years as cement producers ramp up project activity. Eagle Materials, Incorporated (NYSE:EXP) (Dallas, Texas) put plans to construct a grassroot cement manufacturing plant on hold in Lovelock, Nevada in favor of replacing a kiln line in Fernley, Nevada. The company will proceed with plans to open a limestone quarry in Lovelock to support area operational cement plants. Looking ahead to 2007, there have already been 135 projects with a total investment value of $2.1 billion scheduled to begin construction. Industrial Info expects planned project spending for the cement manufacturing sector to increase as 2007 closes in and eventually surpass that of 2006. Demand for cement is up, and in a state that imports up to 40% of its cement from overseas, Florida is the logical place to build new capacity. The industry has answered the call for more cement product in Florida and nationwide with a number of plant expansions and grassroot plants across the country that will keep engineering and construction firms busy for the next five to six years. Two major plant expansions and a new grassroot plant have recently started initial site work activities in Florida. This includes expansions for Florida Rock Industries, Incorporated (Jacksonville, Florida) and Rinker Materials Corporation (Leesburg, Florida) as well as a new grassroot plant for start-up American Cement Company, LLC (Anthony, Florida). American Cement Company is a joint venture between Dixie Lime and Stone Company (Kingston, New Jersey) and Oldcastle Materials Company (Washington, DC), a division of Cement Road Holdings PLC (Dublin, Ireland). Oldcastle recently acquired a 50% interest in the project for $50 million. Dixie Lime and Stone own the limestone quarry where the new plant will be built near Sumterville, Florida. American Cement is using Fru-Con Engineering (Tallahassee, Florida) to provide the detailed engineering on the project and recently awarded the general construction contract to pulp and paper expert Spirit Construction Services, Incorporated (Green Bay, Wisconsin). Site work began during the early summer months. Florida Rock Industries also selected Fru-Con as its engineer for a $150 million expansion, which will add a second production line being supplied by Polysius (Atlanta, Georgia). Heavy mechanical installation work is scheduled to begin February 2007. The second line is scheduled to begin operations by the first quarter of 2009 and will increase plant capacity up to 1.7 million tons per year. The third project to start construction this summer in Florida is Rinker Materials’ expansion of its Brooksville, Florida cement plant. The AMEC-Zachry joint venture is handling engineering, procurement, and construction activities at the site. Essroc Cement (Nazareth, Pennsylvania), a subsidiary of Italcementi Group (Bergamo, Italy), is continuing a string of North American cement plant expansion and modernizations. In 2006, Essroc began demolition work in preparation for a $300 million modernization at the company’s cement plant in Martinsburg, West Virginia. Essroc recently awarded FL Smidth, Incorporated (Bethlehem, Pennsylvania) the engineering and equipment contract for a new 5,000-ton per day dry process kiln line, which includes a rotary kiln, preheater, and clinker cooler. Once operational in 2008, the new plant will produce 1.8 million tons per year. This new capacity will replace about 800,000 tons per year of capacity from the existing three wet process kilns at the Martinsburg plant and about 510,000 tons per year of capacity from the company’s cement plant in Frederick, Maryland, representing a 38% increase in capacity. The Frederick plant operates two wet process kiln lines, which are scheduled to be shut down along with two of the wet process lines at Martinsburg. A third wet process kiln line at Martinsburg will be kept open to produce a limited amount of specialty colored clinker. Essroc acquired the Martinsburg cement plant as part of its May 2002 acquisition of Capitol Materials Corporation. Italcementi Group is the fifth largest cement producer in the world. In addition to the Martinsburg expansion/modernization, the company is planning expansions in Spain, Turkey, India, and Morocco. Eagle Materials, Incorporated (NYSE:EXP) (Dallas, Texas) has been on a much needed cement manufacturing expansion binge as of late. Starting with subsidiary Illinois Cement Company (La Salle, Illinois), the company is marching toward expanding its cement manufacturing capacity by 50%, from 2.65 million tons per year to 4 million tons per year by late 2008. At La Salle, Illinois, the company is currently constructing a $65 million, 430,000-ton per year expansion, which includes an 80,000-ton storage dome. Construction of the dome has been completed, and the remainder of the plant expansion is scheduled to be complete when tie-ins are made during a plant shutdown in December 2006. Humboldt Wedag, Incorporated (Norcross, Georgia) is the equipment vendor on the project. Industrial Info has been tracking this project since its infancy as a preheater expansion in 1999. Earlier this year, the company announced plans to expand cement plants in Laramie, Wyoming and Fernley, Nevada to the tune of $320 million. At Laramie, a new kiln line will replace two aging dry process lines currently in operation, doubling production capacity up to 1.1 million tons per year. Mountain Cement, the Eagle Materials subsidiary that runs Laramie, has been under fire as environmental groups litigate to force it to install a new baghouse on kiln #2, replacing the existing electrostatic precipitator. The expansion project, which will include a baghouse on the new kiln line, will replace this project. At Fernley, a new kiln line will replace two existing lines increasing capacity by 60%, up to around 1.1 million tons per year. Eagle Materials owns 50% of a fourth cement manufacturing plant in Buda, Texas. Texas Lehigh Cement Company has a capacity of 1.2 million tons per year. Lehigh Cement owns the other 50%. Another construction products-related business of Eagle Materials is also involved in expansion. The company’s gypsum wallboard manufacturing plants will be expanded as well. Eagle Materials was created in January 2004 as a spin-off of Centex Corporation. Following the trend of foreign-owned cement producers increasing market share in North America is Brazil’s largest cement producer, Votorantim Cimentos (Sao Paulo, Brazil). Over the last five years, the company has added in excess of 6 million tons of annual cement manufacturing capacity in the Great Lakes and Southeastern regions of the U.S. through acquisitions and expansions. In the fourth quarter of 2004, Votorantim acquired two cement plants from Cemex, along with a number of cement terminals. Today, the company is continuing its growth strategy in the U.S. with studies for several major plant expansions and new plant additions, which could increase its North American production capacity by 50% over the next five years. Vororantim is the majority owner of Saint Mary’s Cement Company (Toronto, Ontario). Saint Mary’s Cement Company operates four cement plants in North America, including recently acquired plants in Charlevoix, Michigan and Dixon, Illinois. The other two are located in Saint Mary’s and Bowmanville, Ontario. These plants total 5.2 million tons per year of cement manufacturing capacity. Badger Cement, a cement grinding plant, was acquired in September 2003, adding to Saint Mary’s portfolio. In addition to Badger, Saint Mary’s also operates cement and slag grinding plants in Detroit, Algoma, and Nanticoke. The company has big plans for growth and is evaluating options to expand the Dixon Cement operation. The company is studying sites in the vicinity of its existing limestone quarry in Dixon to expand limestone reserves and is also studying long-term options to upgrade and expand its existing pyroprocessing line, with the possibility of adding a new kiln line. At the Saint Mary’s plant, the company will be upgrading the clinker cooler. In addition to its Great Lakes leadership position, Votorantim owns 50% of Suwannee American Cement, LLC in Florida. In 2003, the company started up one of the only new U.S. cement plants to come online in recent years in Branford, Florida. Built at a cost of $130 million, the plant produces 750,000 tons per year. Now, the company is evaluating doubling the capacity at Branford. Votorantim is also joining the fray to expand cement manufacturing for the Florida market, backing a grassroot limestone quarry and cement plant being proposed in central Florida. The $200 million project is being designed to produce 1.7 million tons per year of cement. Environmental Compliance & Regulatory Issues The Metals & Minerals Industry is spending more time on permitting and regulatory issues, especially where new grassroot mining operations are concerned. Permitting can take up to three to four years for a new coal or metals mine in the U.S. Efforts to reduce NOx, SOx, and particulate emissions are being addressed in the steel, cement and mining sectors. Steel Industry Continues Investment Trend as Market Remains Strong Record profits in 2004 and 2005 will lead to increased steel mill reinvestment and capital project activity in 2006. The American steel manufacturing industry is stronger than ever, after several years of consolidation, new labor agreements, and technology improvements resulting in a leaner, invigorated, and more efficient management structure. Following a turnaround year for steel manufacturing profitability in 2004 and continued rising steel end-product demand, due in part to increased residential, commercial, and industrial construction, the U.S. steel industry is developing a significant number of capital projects to improve efficiency, expand capacity, and increase raw material supply. Currently, there are at least 110 capital and maintenance projects at U.S. steel mills, totaling about $4.4 billion in total investment value (TIV) scheduled to begin construction beginning in 2006. Around 23% of the planned spending will occur in Ohio, which has fourteen projects totaling about $1 billion. The SeverCorr project, the largest steel mill project on the books, is a $725 million grassroot steel mill planned in Columbus, Mississippi. Construction should start soon on this project. Outsourcing Trends A historical reduction in technical departments, due to downsizing and industry consolidation, has led to outsourcing of many core company functions at metals and minerals operations. Maintenance, engineering, construction, financial services, security, and safety are being outsourced to companies with expertise in those areas. Large corporations with multiple operations and centralized plant/mine support infrastructure are, in some cases, finding it cost effective to sign alliances with major equipment suppliers, and engineering firms. This also allows for company-wide quality, safety, and environmental specifications to be upheld. One example of the success of alliances on capitalizing on the synergy between companies with varying expertise is the AMEC-Zachry alliance. What started as an alliance in 2003 has now developed into a major force in meeting the requirements for grassroot cement plant engineering and construction in North America. The AMEC-Zachry partnership actually began several years prior to 2003, as AMEC Industrial and Infrastructure (Tucker, Georgia), a division of AMEC (LSE:AMEC) (London, England), coupled its engineering expertise with Zachry Construction Company’s (San Antonio, Texas) construction expertise successfully engineering and constructing a number of cement plant expansion projects for Ash Grove Cement, Phoenix Cement, and Titan Cement. The companies made the alliance official in March of 2003. Developing the partnership in leaner times has positioned the AMEC-Zachry alliance to take advantage of today’s boom in cement manufacturing capacity expansion in the U.S. Recently, the alliance received two major contracts for engineering, procurement, and construction of major cement plant projects with a combined investment value of $500 million, one in California and one in Florida. Late last year, the alliance, operating as Oro Grande Contractors, mobilized in Oro Grande, California to begin construction on TXI’s long-planned $350 million modernization project. The newest project for the alliance is an expansion of the Brooksville, Florida cement plant for Rinker Materials Corporation. Zachry is scheduled to mobilize on-site the week of July 24, 2006. Construction of the $150 million expansion, which consists of adding a new pyroprocessing line, will begin shortly. FL Smidth (Bethlehem, Pennsylvania) has been awarded a $64 million contract to supply the new production line. Bid documents for installation and specialty construction subcontracts will be released through Zachry. When complete in 2008, the new production line will increase the plant’s cement manufacturing capacity up to 2 million tons per year from its current rate of 800,000 tons per year. Like the TXI project, Rinker's Brooksville expansion has been in the works since the 90s. Industrial Info has been tracking this project since 1995 when original owner, Florida Crushed Stone began studying an expansion at the site. Rinker subsequently purchased the operation. The AMEC-Zachry alliance is not limited to cement projects, with active projects in numerous industries including power and LNG. Economic Issues Economic growth in Asia, particularly China and India, will continue to drive worldwide investment in the Metals & Minerals Industry. For the U.S., some economic indicators such as fewer housing starts are pointing to a slowdown in economic growth, with GDP expected to drop from about 3.4% in 2006 to 2.9% in 2007. Industrial Info is forecasting that the momentum of this record number of project activity to at least maintain 2006 spending if not decline by a small percentage. Rising raw material, energy, equipment, and services costs will continue to drive up the spending of new construction in the Metals & Minerals Industry. Both industrial plant owners and engineering & construction firms are looking to create alliances in order to capitalize on synergies between service companies and what they can offer construction projects in order to keep costs at a minimum. Increased energy prices coupled with consumption, shortages, and price increases of key construction materials, such as steel, cement, and concrete products, will continue to be deterrents to industrial productivity. Qualified labor will be at a premium in 2007. The industry will increase its use of labor unions to fill the need for qualified crafts and contractors. The industry will also look to foreign sources of labor such as India, South America, and Mexico. CANADA Canada, which was projected at the end of 2005 to have $13 billion in project spending for 2006, is seeing its project spending for 2007 decrease to $6.8 billion. The large jump in expenditures for Canadian projects in 2006 can be attributed to construction starts for mega-projects in the oil sands sector, such as the giant $10 billion Athabasca Oil Sands project, which began site preparation activities during the summer of 2006. Construction activities on the massive project will peak in 2008 and are scheduled to complete by 2009. The decrease in 2007 can be mainly attributed to a drop in planned oil sand mine construction starts due to labor, equipment, and service shortages staffing existing projects in the area. MEXICO Five major mining operations will be launched in 2007. With a combined investment of $500 million, they will be located in the states of Chihuahua, Guerrero, Sonora and Zacatecas. The largest of the new projects is El Penasquito in Guerrero, which has potential ore reserves of gold, silver, lead and zinc exceeding 466 million tons. The Mexican Association of Mining Engineers, Metallurgists and Geologists believes that the mining sector in the country, which generated $5.954 billion in the last financial year could easily double that figure within the next few years. The sector has boomed from the rise in commodity prices. With record-breaking prices for copper, molybdenum, silver and zinc exploration, new development and expansions are gathering pace going into 2007. As the world's leading silver miner, Mexico is looking to beat the 3.9% growth in silver production for the previous year. The country is the fifth largest producer of lead (156,000 tons) and zinc (418,000 tons). Ranking 11th in world copper production, Mexico produced 368,000 tons in 2005 and should top this figure in 2007, if the industry can remain strike-free in a more settled national political environment. The recent 46-day strike at Grupo Mexico’s Cananea copper mine was a factor in the depletion of world stocks of the metal and a rise in global prices. Gold production is also expected to rise as new projects come into operation in 2006 and 2007. In 2005, the country produced 31.5 tons of gold, which represented an increase 28.8% over the previous year. As is the case with Central and South American countries, there is growing activity in the uranium prospecting and exploration field, which is chasing the long-term prospects for nuclear power generation. Record trading figures with the U.S. and the global hunger for mineral resources will underpin the sector's continued growth if internal stresses in the labor market and between the unions and central government can be eased. In the first half of 2006, U.S. trade with Mexico reached $166 billion, which represented a 17.2% rise of $24.4 billion over the same period last year. Attention is also being focused on improving environmental practices as the long history of mining in the country, going back five centuries and beyond, has increased water pollution and land degradation. The mining boom has brought some relief to the unemployment situation, increasing employment to 264,448 workers in 2005. It is the interests of all sections of the government and civil society that this trend continues. A consensus on growth for 2007 sees a GDP figure of 3.5% after hitting 5.1% in the first half of 2006 and a predicted rate of 4.5% for this year. In the first six-month period of 2006, GDP rose to a record $875.1 billion. Services accounted for 49.5%, industry 26.6%, retail, restaurants and hotels combined for 21.2%, and agriculture 3.9%. Mexico has also pre-paid $9 billion worth of its $12.4 billion debt to the World Bank, which sends a positive long-term message to potential investors in new projects. Foreign Direct Investment (FDI) is expected to continue to increase through 2006 into 2007 from the $19 billion figure reached in 2004. With estimated coal reserves of 1.3 billion tons of coal, the country mines over 20 million tons per annum, which covers about 60% of its domestic needs where it goes mainly to power generation and steel making. In the first seven months of 2006, total steel output stood at 9.395 million tons, which was 3.8% down from the figure for the same period last year. Restructuring and the effects of global consolidation of the industry could see this total grow in 2007. The basis for a growing export market to China has been established. Grupo Mexico is the largest mining company in Mexico with leading global positions in copper, silver, zinc and molybdenum. Industrial Penoles SA is the world leader in silver production and the world's leading producer of metallic bismuth and sodium sulfate. In the total of nearly 200 foreign companies operating in the sector the majority is North American. |
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| © 2009 ALL RIGHTS RESERVED. Industrial Info Resources, Inc. - Sugar Land, TX - 800-762-3361 | Back to Top |
© 2009 ALL RIGHTS RESERVED. Industrial Info Resources, Inc. - Sugar Land, TX - 800-762-3361
