The last couple years have been great for the mining industry and looking forward, there’s no reason to expect the recovery to lose any steam. Analysts are optimistic about the continued recovery and generally agree that the mining industry will see significant growth and prosperity over the coming years.
Increased bottom-line numbers for mining companies prove the recovery is real.
Mining companies across The United States and Canada are seeing the trend of increased profits continue. Companies such as Rio Tinto, Freeport-McMoRan and Anglo-American reported strong financial profits and significantly improved cash flow for FY2018; a trend we’ve seen for three years in a row now. The recovery started a couple years ago, triggered by healthy macroeconomic fundamentals, hefty reserves and deregulation implemented by the Trump Administration.
Profits remain strong for companies that are mining nickel, lead, copper, tin and gold while historically traditional materials such as iron and coal remain stable throughout the United States and Canada. Although the Trump Administration continues to take several actions intended to help revive the U.S. coal industry, their repeated attempts to “save coal” have been a struggle up to this point. However, the mining industry as a whole is trending in a positive direction.
The mining equipment market is helping to facilitate the growth in the mining industry.
The recent recovery in the mining industry has been sustained and fueled by its sister industry – mining equipment lending. The mining equipment market is helping mining companies scale their fleet and improve their machinery to meet the upcoming demand. Many are financing new and used mining equipment and fixing or upgrading currrent equipment to better position themselves for the upcoming demand in the next few years.
Just a couple years ago, the global mining equipment market size was valued at USD 120.82 billion, but the latest predictions estimate a CAGR of 11.7% that will more than double the global mining equipment market to USD 284.93 billion by 2025, according to a recent Grand View Research report.
Risk is still a factor.
Even though the forecast and outlook for mining in The United States and Canada is expected to continue for the next couple years, that doesn’t mean there is zero risk. Mining companies will still struggle with historical issues they have always faced. Tension over water usage from local communities, political turbulence in countries of operation and public movement away from coal and fossil fuel to renewable energy will still pose a threat to the mining industry recovery.
Even with risk, most expect the mining industry to see positive growth.
Even with the risks mentioned above, most analysts and industry experts agree the recovery trends we’ve seen over the last couple years will continue for the rest of 2019 and well into the future. The mining and mining equipment industry appear healthier than they have in years, and there’s no reason to think that will change any time soon.
*This article was originally posted on our Site123 Blog here on June 1, 2019