The mining equipment rental sector could be faring better, but industrial instrument service providers are expected to encounter consistent business in the near future.
Repairs and serving remain strong
A study conducted by Frost and Sullivan analysed two correlative trends. When extractives companies reduce investments, the equipment rental market suffers, because it depends on pit construction and expansion initiatives.
In contrast, repairs and maintenance are less affected by the wax and wane of operational investments. Instead, this sub-sector is more responsive to production volumes. If mines continue to produce, that means the machinery and instruments within those pits will require consistent, ongoing maintenance.
“As repair and maintenance expenditure is subject to mining production volumes and hence equipment utilisation rates, as a result of a very sizeable increase in the equipment base over 2012 and 2013, the equipment repair market has continued to grow, spurred by the need for increased repair requirements,” said Frost & Sullivan’s Managing Director of Australia and New Zealand, Mark Dougan.
Production remains robust
Although there have been plenty of discussions about Australia’s mining decline, figures from the Australian Bureau of Statistics (ABS are contributing a different perspective.
The ABS discovered that the mining industry’s sales and services revenue rose 7 per cent between 2012-13 and 2013-14. In addition, metal ore mining increased 16.1 per cent within that same time period, accounting for $108.2 billion in revenue.
Given the insights provided by Frost and Sullivan, this should lead to an uptick in mining equipment repairs and maintenance.
It turns out that miners across the globe may also purchase new assets to support existing operations. According to a report by management consulting and market research company Lucintel, the world’s mining equipment sector is expected to expand at a compound annual growth rate of 3.5 per cent between now and 2019.
Lucintel emphasised the prevalence of technological development as one of the key drivers of this market. Depending on the solutions miners use, it’s possible they’ll need assistance from manufacturers and other experts to maintain them.