Mining production volumes of key minerals like coal, nickel, bauxite, perlite and bentonite in Greece is forecasted to decline by 3.2% in 2012, according a new report by the UK based research firm BRICdata.

The decline is due to the country’s worsening economic conditions over the past five years that will continue to have a negative effect on its mining industry.

The mining production volume was down by -6.62% during the review period 2007-2011, though it is projected to grow at a rate of 2.52% over the forecast period 2012-2016.

The report reveals that recession has mainly affected the production volumes in the country during the review period, where coal and bauxite production shrank during 2010-2011, and this decline is expected to continue in 2012.

During the forecast period, the production of nickel, perlite and bentonite reported a positive growth and is projected to continue growing.

Over the review period, production volume of coal, mainly used for power generation in Greece, declined at a CAGR of -7.15%, though it is projected to grow at 1.14% over the forecast period.

BRICdata cited OECD figures which show that poor economic conditions will have an adverse effect on the mining industry and the country’s industrial activity which have reduced the power demand in Greece.

Greek mining industry growth has traditionally been driven by exports, and this tradition is expected to continue over the forecast period.

The research projects mining production output to fall further until the second half of 2013, when the rate of fiscal consolidation is likely to slightly ease, the impact of structural reforms to enhance competitiveness and encourage investment starts to be noticed, and international demand for minerals strengthens.

Due to this, the Greek mining industry will only start recovering from the second half of 2013.

The full report, "Greek Mining Industry Outlook – Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016" is available from BRICdata. Click here for more details.