A new report states that the world demand for all mining equipment is expected to rise 8.5 percent every year through 2015.
The world market for mining equipment is expected to reach $92 billion in the next three years, as strong demand will be encouraged by higher mining output growth. This higher output will be spurred by rising global manufacturing activity and construction expenditures, which will speed up as the global economic climate returns to generally favorable conditions.
The higher demand will also be seen as commodity prices are expected to remain high by historical standards, which has already brought about a rise in resource exploration and development activity – directly contributing to higher mining machinery sales.
Additionally, the effort to boost mine equipment performance and mechanization in the massive Chinese market, as well as the need for greater productivity in sprawling, high-labor cost mining projects in Australia in Canada, will contribute greatly to the growing overall equipment demand.
The report highlights the importance of the Asia/Pacific region to the mining equipment market, as the area is expected to remain dominant and grow the fastest in the next three years.
Following historical trends, the Asia/Pacific region is expected to report the largest market advances through at least 2015, driven by strong increases in mine production and mining machinery sales in China, India and Indonesia. Much of the demand will come from China, which is expected to account for 57 percent of all new mining equipment demand in the next three years, despite the probability that the country’s flourishing economy will begin to slow in the next three years.
Central and South America will see the second fastest gains as the region’s manufacturing and construction industries are expected to rise, which will lead to a greater demand for mined materials. Africa and the Middle East will post the third-highest market advances, followed by North America, Eastern Europe and Western Europe.
All four areas are expected to see higher mining output and associated machinery sales on the prediction that there will be generally healthy economic growth in the next three years with commodities prices remaining high.
The market for machinery necessary for mining metals, which holds the largest share of world sales, is estimated to grow at the swiftest pace, supported by price-driven increases in resource exploration and mine optimization strategies. Equipment used in coal mining will likely climb nearly as fast, as primary metals manufacturing growth accelerates in several markets. Growing populations and more economic activity will yield more demand for coal to be used in heating and electricity generation, as well.
The fastest-growing product segment is expected to be for mining drills and breakers, as these items are imperative in most operations where breaking through the ground and subsurface materials are necessary. Crushing, pulverizing and screening equipment is expected to capture second place, as such equipment is also used regularly in both surface and underground mining.
Demand for surface mining equipment will also expand, albeit at a slower rate than underground mining equipment, and will continue to account for the largest single share of equipment demand.
According to Bloomberg, the rising demand for mining services has already led Caterpillar Inc., the largest mining equipment maker in the world, to report higher fourth-quarter income than initially expected.
The company’s net income rose to $2.32 a share from $1.47 last year.
Brian Rayle, a Cleveland-based analyst for Northcoast Research Holdings LLC, told the news source that “the mining business is going to continue to be very strong,” with capital spending at major mining companies expected to grow 25 percent in 2012.
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