Economic Outlook for Financing; Brazil, Russia, India, China
Through the course of 2009 and 2010 all nations have pulled together to stimulate global trade and domestic consumption. But no country has arguably been more successful at stimulating its way through the financial crisis than China. As it did in 2009, China is forecast to lead all major nations in economic growth in both 2010 and 2011 with many forecasts now indicating a return to double digit growth in those years. Although other BRIC nations are also forecasting robust growth none will match China. And while the Chinese equity markets did not quite match the over 100% recovery in Russia in 2009, they were not recovering from as low a base either. The impact of Chinese growth on the global mining industry has been and will likely continue to be substantial. We are all familiar with the robust recovery in base metal and bulk commodity prices which has occurred over the past year. This has been matched by a resurgence in M&A activity by Chinese SOE's and private Chinese mining companies in 2010. This dominance of the global mining M&A market is reminiscent of the levels of Chinese activity seen in 2007 and 2008 and shows no signs of easing any time soon. The recent announcement of the $1 B JV created by China State Grid and Canada's Quadra is a reflection of the depth and breadth of China's current interest in mineral resources. As the Chinese presence on the international mining stage grows the Hong Kong Stock Exchange has also been growing as a world class source of mining equity. Two recent IPO's, that of Canada's SouthGobi Energy and Russia's UC Rusal, marked the emergence of Hong Kong as not only a source of equity for Chinese SOE's but a growing source of equity for mining companies around the world. China's current dominating impact on commodity prices, mining M&A and mining finance has never been greater.