MINING INDUSTRY EQUIPMENT
Australia
Overview
| x | 2004 | 2005 | 2006 |
| Total Market Size | 3532 | 3304 | 3820* |
| Total Local Production | 1867 | 1820 | 1995* |
| Total Exports | 560 | 610 | 645* |
| Total Imports | 2225 | 2094 | 2470* |
| Imports from the U.S. | 801 | 730 | 860* |
All amounts are in USD $ millions
Exchange rate:
2004 0.73
2005 0.76
2006 0.75
* Estimated based on industry information
The mining industry in Australia continues to go from strength to strength with 2006 being another record year in terms of production. Production for the year 2005/06 is estimated at US$67.3 billion up from US$50 billion in 2004/05 – a rise of around 35 percent. It is further expected to increase to around US$80 billion in the coming year as a result on the increased number of mines and the development of infrastructure over the last five years.
Australia is still the largest exporter in the world of black coal and also leads export volumes for diamonds, iron ore, lead, rutile, zinc and zirconium. It is by only a narrow margin the second largest exporter of both gold and uranium, and the third largest exporter of aluminum and bauxite. The state of Western Australia (WA) still leads mineral production in Australia accounting for an estimated 50 percent of Australian mineral production. WA hosts an impressive 560 commercial mineral projects, embracing 1,222 operating mine sites (open pit, underground mines and quarries), plus 171 processing plants.
Other major mining states are Queensland (~25% Australian production) and New South Wales (~15%), with the remaining states accounting for the balance of production.
Renewed interest in uranium has led to rush of new companies undertaking exploration for uranium Australia-wide. At the time this report was prepared there were still moratoriums on the production of uranium except in the states of South Australia and the Northern territory. Potential changes to legislation allowing mining of uranium in other Australia states could drive significant growth of new mines.
Continuing high mineral prices had led to further exploration work across the country. Given the size of the country and difficult access to many areas, Australia is relatively unexplored by world standards. In 2005/06 private enterprises spent $930 million on minerals exploration in Australia, representing a 20 per cent increase from 2004/05.
Much of this exploration work is being undertaken by small-cap mining companies, many of whom have appeared recently on the Australian stock exchange. Of the 42 companies that listed in the last two months of 2006 – 50% were mineral exploration companies. In terms of mineral production the Australian mineral industry is still dominated by large players such as BHP Billiton, Rio Tinto, Xstrata, Alumina Ltd and Newmont.
Despite the recent falls in metals prices from historical high levels, the industry is convinced that ongoing demand from emerging and developing markets will underpin continued growth of mining in countries like Australia. Estimates of industry growth for the coming year vary between 10% and 20%.
A key area of concern to the industry is the inflation of costs associated with the development of projects and the shortage of skilled and semi-skilled staff. It has been estimated that by 2015, the minerals sector will need to employ 70,000 more employees than it currently employs to achieve predicted increases in output.
Best Products/Services
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Products for open cut mining (as many miners shift from underground to open cut production)
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Heavy equipment parts – has been a shortage of tires and other components
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Specialized treatment procedures for specific minerals (i.e. laterized nickel, heap leaching)
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Automation of materials handling and other operations
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Mine planning / optimization software – as more mines move towards contract mining
Opportunities
As of November 2006, there were 42 mining projects being construction or about to begin construction with a total estimated project cost of $11.2 billion. Around half of these projects are located in the state of WA. Many of the WA project are significant in size such that the estimated value of projects in WA is around $9.0 billion. Aside from these there are a number of planned projects in the design and/or development phase. Details of these can be found in the table below.
| Mineral Project | Number of Projects | Estimated Capital Expenditure |
|---|---|---|
| Coal | 35 | $7,256m |
| Copper | 10 | $4,698m |
| Gold | 18 | $255m |
| Iron Ore | 16 | $10,497m |
| Nickel | 11 | $4,907m |
| Other | 40 | $4,530m |
Resources
Trade Events:
AIMEX: ASIA PACIFIC’S INTERNATIONAL MINING EXHIBITION
Date: 4-7 September 2007
Location: Olympic Park, Homebush Bay, Sydney
Website: www.aimex.reedexhibitions.com.au
Trade Associations:
Australian Coal Association - www.australiancoal.com.au
Australian Institute of Geoscientists - www.aig.asn.au
Australasian Institute of Mining and Metallurgy - www.ausimm.com.au
Australian Drilling Industry Association – www.adia.com.au
Mineral Council of Australia - www.minerals.org.au
Mining Equipment & Services Council of Australia (MESCA) - www.mesca.com.au
U.S. companies seeking information on the Australian mining industry are encouraged to contact John McCaffrey at the U.S. Commercial Service in Melbourne
(email: john.mccaffrey@mail.doc.gov ).