Mining machinery demand remains strong

A The Freedonia Group product story
Edited by the Engineeringtalk editorial team May 12, 2006

Global demand for specialised mining machinery and equipment (including separately sold parts and attachments) is projected to increase 9.3% per year until 2009 to $27.5 billion.

Global demand for specialised mining machinery and equipment (including separately sold parts and attachments) is projected to increase 9.3% per year until 2009 to $27.5 billion.

The earlier part of that period was skewed downward by a weaker commodity pricing regime, which suppressed sales of related capital equipment like mining machinery.

Beginning about 2002-2003, prices for mineable commodities - especially metals like copper, silver and gold - began to firm, and then surged in 2004 and continued into 2006.

This has led to intensified efforts to mine metal ores, and thus has generated healthy demand for products like mining machinery.

Meanwhile, coal, while facing dwindling reserves in numerous countries, remains in demand as an alternative source of energy in an era of high oil and gas prices, while demand for industrial minerals (clays, sand and gravel, stone and a myriad of others) has benefited from the general upsurge in commodities markets.

These and other trends are presented in "World mining equipment", a new study from The Freedonia Group, a Cleveland-based industry research firm.

Eastern Europe, with extensive mineable resources and after a long period of underinvestment, is projected to exhibit the fastest growth in mining equipment demand through 2009, followed by Asia (led by China), the Africa/Mideast region and Latin America, with the mature markets of Western Europe and North America trailing.

Within the latter two regions, however, are some fairly notable global mining powers, including the USA and Canada in North America, each with an abundance of natural resources; and Germany in Western Europe, which is a major source of coal.

Despite their maturity as markets (owing much to dwindling local mineable reserves), the largest producers of mining equipment are generally found in the USA and the industrialised nations of Western Europe, as well as Japan.

Such countries have a long history and extensive expertise in the development of capital equipment industries of all types, which many have leveraged in mining machinery.

In addition, numerous countries have vertically integrated into mining equipment production due to the presence of large upstream mineable resources.

Among the most notable of these are Australia, Canada, China, India and South Africa.

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