DRIVING FORCES OF THE MINING SECTOR

DRIVING FORCES OF THE MINING SECTOR

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Growing exploration around the world will drive mining equipment market size in times to come. Moreover, policy and measures initiated to revive the mining sector are a positive sign. The permission Government of India for 100 per cent foreign direct investment (FDI) in the mining sector under the automatic route has further enhanced the market. Furthermore, steps such as the Mining lease being granted for a long duration of minimum 20 years and up to 30 years has impacted it further. As the levels of project development are being pushed upon, there is a growing demand for the mining equipment market. The metal and mining industry of India has recorded a strong 19.8 per cent expansion in 2011 to touch US$ 141.9 billion and is expected to reach 305.5 billion by 2015. Production volumes have also been growing steadily over the years – during the period 2007-2011, it registered a CAGR of 5.2 percent.

Mining equipment market share may witness considerable growth on account of technological advancements for energy efficient alternatives. The sales service and maintenance activities are crucial for gaining competitive advantage in the ecosystem. The requirement to cope with lower ore grade and more remote locations is driving the need for innovation and automation.

 

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The equipment market report and the expert opinion:

‘Is growing very fast and with the import cost going up, the domestic production is bound to go up in the future’, remarked Mr. Sandeep Agarwal MD, Ariando Infra Machines and his claim seems to be right. The smart mining market is estimated to grow from USD 3.84 Billion in 2015 to USD 9.98 Billion by 2020, at a Compound Annual Growth Rate (CAGR) of 21.0% during the forecast period. The deployment of smart mining solutions helps mining companies to minimize their labor expenses and increase the production efficiency by real-time monitoring and communication.

Surface Mining Equipment Market share accounted for over 35% of the overall revenue in 2015 and will grow at 3.4% from 2016 to 2024. Growing demand for technically advanced solutions and increasing activities mainly in developing countries will drive consumption. Increasing disposable income and living standards of consumers have fueled demand for copper, aluminum, gold and other commodities. Mining drills & breakers segment will benefit from rising demand for underground mining of metals, coal & minerals and evolution of effective solutions with the help of robust technological support.

 

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Multi-function machinery is increasingly being adopted for their cost-saving versatility over single function equipment. These advancements enable operators to significantly reduce the time & labor required to complete the tasks with extended productivity and improved efficiency. Quick-change attachment couplers, cab designs, and joystick controls have made machinery more feasible for operation simultaneously reducing operator fatigue.

‘If you see backhoe machines statistics you will find out that for coming 2 years or so it is going to be an upward rise of 25000 machine market all put together. Plus it might be exceeding that. In this respect, we are targeting for 10 to 15 percent. We’re trying to get exclusivity. Out of these 25000, 23000 would be on soft strata in which only 10 people are competing in which there is a distinctive advantage which is lacking in general category. We are trying to establish in this market’, said Rajinder Raina, General Manager-Marketing, Escorts Construction Equipment. He further adds, ‘If you see backhoe machines statistics you will find out that for coming 2 years or so it is going to be an upward rise of 25000 machine market all put together’.

Metal mining equipment market size was valued at over USD 29 billion in 2015 and will grow at 5% CAGR over the forecast timeline. Increasing demand for metals, particularly precious metals such as gold would fuel demand. The demand for gold has been supported by the cultural, emotional and financial value of the customers. Increasing demand for coal in electricity generation, cement manufacturing, and steel production will propel coal mining application growth. Asia Pacific mining equipment market size was valued at USD 40 billion in 2015. Rising demand for higher energy efficiency, low cost, and lower emissions will offer potential growth opportunity in the Chinese industry from 2016 to 2024. Dimitrov Krishnan, VP, and Head Volvo rightfully said in this year’s April that there was huge demand from the mining sector for the machinery of mining projects especially for the capacity excavators and the trend seems to continue.

 

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The government initiative such as ‘Sagarmala Program’ has further enhanced the pathway for manufacturers. Firms are trying to create a market but mining owners should also b willing to try out new innovations. Places such as Jharkhand pertaining to government initiation is an area that would open up even more in two years time.

Demand of Earth Moving Construction Heavy Equipment

Heavy Construction Equipment Market is worth 166.05 Billion USD by 2020. Depending on the project application, several heavy types of equipment is used in different The heavy equipment could be divided into four major types: Earth-moving equipment, Construction vehicles, Material handling and Construction Equipment. Equipment starting from Skid steer loaders to Backhoe loaders, Excavators to Bulldozers, Crawler Loaders to Motor Graders, the demand is rising with each passing day.

 

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This year’s BC India is a primary example of it, with new launches and announcements happening.

‘The entire earthmoving and construction equipment industry saw a downward spiral for about 4 to 4 and half years. However, over the past two years, the tipper industry has been slowly recovering and growing. Currently, the tipper industry along with the entire earthmoving and construction equipment industry is growing at around 45 percent’, said R C Mangal, Sr. Vice President Sales & Marketing.

The global construction equipment market is growing steadily with improving economic conditions and increasing investment in construction sector globally. Emerging economies across the world are investing the significant amount of energy, transportation and other construction projects to support their economic developments. In the excavator categories the machines above 30 tons, have enjoyed huge success over the years.

According to the industry experts, the overall slowdown in global market had taken a toll on infrastructure investments in India as well, especially in the last few years. To counter this issue, the government has set ambitious targets as part of the ongoing Twelfth FYP (FY12FY17), proposing INR 56 lakh crores of investment in infrastructure. These targets are heavily weighted toward the second half of the plan, with 52 percent of total investment expected in the last two years of the plan period. Moreover, the Union Budget of the new government has earmarked ` 2 lakh crores for investment in infrastructure. The investments are allocated for a broad range of infrastructure projects such as the mining sector. We can look forward to more growth in 2017, with a further pick-up in 2018 and 2019.

The demand is increasing very rapidly. The economic growth and increased spending on infrastructural activities have played a huge part in providing the necessary boost to the global heavy construction equipment industry. The global heavy construction equipment industry is projected to grow at a CAGR of 6.80% from 2015 to 2020. The earthmoving equipment is the fastest growing segment of the heavy construction equipment market across the globe

 

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Coming succesfull in technological innovation

Once a new mine is successfully and profitably operating with its tried and true equipment, the impetus for technological change can be relatively small. If acceptable returns are being generated with conventional technology, then justifying capital expenditure on new technology in these profitable operations can be very tough.

In fact, this is a component of a general improvement paradox which we often see in mining. When times are good, it is often not possible to justify technological improvements to an operating process because the downtime cannot be paid for by the incremental benefit. The business is so busy making money that it is not possible to justify stopping it simply to make a little more. Unfortunately, when times are bad, the business cannot justify the increased capital investment that it needs to run at lower costs and higher efficiency. Attracting investment in a business that is showing poor returns at that point is very difficult. The net effect of all of this is that the mine starts with conventional technology and runs it through good and bad times until it absolutely doesn’t work anymore or is hopelessly obsolete. Short of serious crises or major developments, minor tweaks to operations and equipment are often all that happens technologically until the mine closes.

Moving Forward

The allocation of budget and government constant awareness will surely impact the mining sector immensely and in a really positive way. The growing interest will only aid the overall sales of the mining equipment and contribute to an overall growth. The simultaneous increase in coal and mineral production would surely require new and updated machinery.

References

– https://www.thebalance.com/must-have-earth-moving-construction-heavy-equipment-844586https://www.thebalance.com/must-have-earth-moving-construction-heavy-equipment-844586
– https://www.thebalance.com/must-have-earth-moving-construction-heavy-equipment-844586
– http://www.marketsandmarkets.com/Market-Reports/connected-mining-market-210875078. htmlhttp://www.marketsandmarkets.com/Market-Reports/connected-mining-market-210875078.html
– http://www.marketsandmarkets.com/Market-Reports/connected-mining-market-210875078. html
– https://www.gminsights.com/industry-analysis /mining-equipment-markethttps: //www.gmin-sights.com/industry-analysis/ mining equipment-market
– https://www.gminsights.com/industry-analysis/mining-equipment-market
– http://www.ibef.org/industry/metals-and-mining-presentationhttp://www.ibef.org/in-dustry/metals-and-mining-presentation
– http://www.ibef.org/industry/metals-and-mining-presentation
– http://www.ibef.org/industry/metals-and-mining-presentation
– https://www.ausimmbulletin.com/feature /inno-vation-in-mining/http s://www.ausim mbulletin.com/ feature/innovation-in-mining/
– https://www.ausimmbulletin.com/feature /innovation-in-mining/
– http://www.marketsand-markets.com/Market -Reports/heavy-construction- equipment-market-1211.html
– https://www.thebalance.com /must-have-ear-th-moving-construction-heavy-equipment-844586
– https://www.thebala-nce.com /must-have-ear-th-moving-construction-heavy-equipment-844586.

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