Contract Mining Services Market Intelligence

Report Coverage

  • Supply–Demand Trends
  • Market Driver-Commodity Price
  • Key Global Supplier Profiles
  • Cost Structure Breakup

Market Size


3-4 Percent

Market Size North America

$ 2.34 Bn

Market Size LATAM

$ 2.1 Bn

Market Size Europe

$ 1.29 Bn

Table of contents

  1. Executive Summary
  2. Global Trends
  3. Supply Market Outlook
  4. Global SE Market Maturity
  5. Category Strategy Recommendation
  6. Category Opportunities & Risk
  7. Impact on Covid-19
  1. COVID-19 Section
  2. Sourcing Location Watch
  3. Supplier Watch
  4. COVID-19 Impact


  1. Market Analysis
  2. Market Overview
  3. Demand by Application
  4. Drivers and Constraints
  5. Regional Analysis
  6. Porter's Analysis
  7. Industry Analysis


  1. Market Monitoring Insights
  2. Cost Driver Analysis
  3. Cost Structure Analysis
  4. Commodity Price
  5. Raw Material Price Trend
  6. Total Cost of Ownership
  7. Procurement Insights
  8. Industry Practices


  1. Supplier Analysis
  2. Global Market Share
  3. KeyGlobal Supplier: UG equipment
  4. KeyGlobal Supplier: Surface equipment
  5. Supplier Profile & SWOTAnalysis

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Global Market Outlook on Contract Mining Services

  • A constant rise in commodity demand coupled with increasing mineral output and declining high-grade ore heads are the key drivers for contract mining.
  • Global economic slowdown, coupled with the Chinese slump, has prompted a fall in commodity prices. This has adversely affected the miners, thereby affecting the demand and profit margins of contractors.
  • The mining industry outlook states that the CAGR is expected to be anywhere between 3 and 4 percent.
  • At present, the demand CAGR globally is -3 to -4 percent according to mining market trends studied by Beroe. This is expected to continue until the end of the year 2023.
  • The current global market size of mining services is more than $11 billion in 2020.
  • The market size of the mining industry is the largest in North America followed by LATAM. The mining industry market size is the smallest in Europe.
  • The mining services industry in North America is over $2.3 billion, in LATAM is more than $2 billion, and in Europe is more than $1.2 billion. 
  • The mining services industry outlook states that by the next few years the total market value of the mining services industry size will exceed $22 billion.
  • The top suppliers of mining services include Macmahon Holdings, Aveng Moolmans, Downer EDI Mining, and Murray and Roberts Holdings among other mining service providers. 
  • The pricing of the mining services is based on three factors; the ore type, the mining type, and the region where the mining is taking place. 
  • The supplier power in the mining industry is medium to high whereas the buyer power is low to medium. 
  • The high market maturity regions include Australia, the U.S., and Canada while the medium market maturity regions include Russia, Africa, Asia, and LATAM.
  • The global contract mining market is expected to grow despite the weak commodity market, as mining companies are preferring outsourcing over new investments to reduce their capital spend and optimize their expenditure.
  • Changing mining conditions with the increase in mining activities, due to heavy equipment usage on account of a lower grade of mines, forces the mining companies to concentrate on their core capabilities such as exploration, sales and marketing while engaging specialist contractors for rock breakage, raw materials preparation and materials handling.
  • Coal, iron ore, gold and copper account for approximately 70 percent of contract mining globally.
  • Australia is the largest contract mining services consumer with around 50 percent share in the global market, followed by Africa (16.8 percent), North America (12.2 percent) and Asia (11.4 percent).
  • The contract mining market, until 2018, is expected to grow at a CAGR of 4 percent, mainly driven by Africa and Australia, at 4 percent and 7 percent, respectively.
  • South Africa, which accounts for two-thirds of contract mining in Africa, is expected to grow by 6 percent, followed by Ghana (7 percent), Mali (7.5 percent), Tanzania and Guinea (8 percent), owing to lower mining costs and higher untapped mines.
  • Increasing commodity demand, along with the expected rise in commodity prices (except, coal), will provide the impetus for the increase in demand for contract mining.

Global Contract Mining Services –Drivers and Constraints


Lower, defined mining costs

  • Reduced capital expense for the mine owner, which allows them to better utilize their cash and also focus on the company's other core capabilities, which may be exploration, sales, and marketing.

Depleting ore grades in mines

  • Depleting ore grades in surface mines have influenced miners to perform deeper mineral extraction, which has increased the demand for contract mining

Large pool of machinery and skilled employees

  • The contractor has flexibility in equipment and always deploy modern machinery to compete with other contractors
  • Deploying employees from the contractor means that the mine owner has smaller workforce and brings effective performance management systems

Employing Cutting-Edge Technologies 

  • Several contract mining service providers are embracing next-gen tech advances as part of their strategies. 
  • Following the rise of automation in the mining sector, surging demand for the Internet of Things (IoT), robotics, and other innovative solutions in mining activities will drive the employment and digging expenses in the mining sector. 


Slump in demand for commodities

  • Fall in commodity prices, as a result of a decrease in demand, would deter mining investments, thereby leading to mine expansion stoppages.
  • This would affect the demand for contractors in the mining market.

High dependence on labor

  • Mines are characterized by a low degree of mechanization. Labor spend constitutes around 35 to 40 percent of the direct mining cost.
  • Mine mechanization has been increasing steadily, there still remains a large number of mines, where drilling and clearing are performed manually.
  • The primary reason for this is narrow shafts in mines, which make mechanization unprofitable.

Degree of mine mechanization

  • Underground mining is experiencing a shift toward mechanization, which is decreasing the need for contract workers.

COVID-19 Pandemic

  • The impact of the COVID-19 crisis on the mining industry trends remains uncertain. With each passing day, the pandemic is severely impacting the supply chains as well as the demand for commodities such as metals, minerals, and mining equipment. Notable price declines were seen across key commodities, while in some cases, prices remain passive.
  • With the rising infection cases across the world, the growth for the mining industry has remained sluggish as companies in the contract mining service industry do not have permission to operate mines with a full workforce.

Market Driver-Commodity Price

  • Prices of key commodities are the best indicators of mining activities and which in turn evinces the demand for mining equipment.
  • In Q4 2018, from October 2018 to November 2018, apart from iron ore and copper (which is expected to increase by an average of 5-6%), average commodity prices for the rest is expected to decrease by an average of 3-4% as compared to last quarters average.
  • Demand for commodities increased tremendously as the economy recovered from the economic recession in 2009. 2010 and 2011 saw a boom in mining activity due to the high demand for raw materials.
  • Late 2013 and 2014 witnessed a slowdown in mining, resulting in the reduced demand for contract mining service providers.
  • Again, 2014–2015 witnessed reduced demand; however, it is expected to see an uptrend in the coming years. The average commodity prices for the rest is expected to decrease by 8-9 percent in H1 2019 when compared to the same period in the previous year.

Why You Should Buy This Report

With this mining services industry report, you get:

  • Insights on the global contract mining industry outlook, maturity, industry trends, drivers and constraints.

  • Regional contract mining market trends of North America, Europe, LATAM, MEA, and APAC.

  • Porter’s five force analysis of matured and emerging contract mining industry.

  • Supply trends and insights, supplier profile and SWOT analysis of major players in the contract mining market.

  • Best sourcing models, cost drivers, cost structure, and pricing models.

Contract Mining Services Market Frequently Asked Questions

  1. What’s the global market size of the mining market according to Beroe?
  2. As per Beroe’s analysis, the global market size stands at a valuation of $20.88Bn and it’s expected to increase at a CAGR of 3 – 4% to reach a $22.64Bn valuation by 2019.
  1. What affected the demand and profit margin of the contractors in the mining services?
  2. The global economic slowdown, coupled with the Chinese slump, prompted the fall in commodity prices affecting the miners and the demand and profit margins of the contractors.
  1. What are the different mining contract types applicable within the industry?
  2. As per Beroe, these are the mining contract types applicable within the industry: Alliancing-Gain Share Alliancing-with Integrated Project Management Team Schedule of Rates Alliance Contract Partnering Agreement
  1. Which regions are the three largest consumers of contract mining services?
  2. Australia is the largest contract mining services consumer with nearly 50% share in the global market. The next-in-line is Africa, North America, and Asia with 16.8%, 12.2%, and 11.4% market share respectively.
  1. Which countries fall in the category of being the high-market & medium-market maturity regions for the industry?
  2. According to Beroe’s study, the US, Australia, and Canada fall in the high-market maturity regions, while Africa, LATAM, Asia, and Russia lie in the medium-market maturity regions.
  1. What contributes to the growth of different African regions in the mining industry?
  2. The two parameters that contribute to the growth of different African regions are: Lower mining costs Higher untapped mines
  1. What’s the average growth rate for different African regions within the mining industry?
  2. South Africa accounts for two-thirds of contract mining in Africa and it’s expected to grow by 6 percent. The other regions like Ghana, Mali, Tanzania, and Guinea are expected to grow at a rate of 7%, 7.5%, and 8% respectively.
  1. On what parameters are the prices dependent on the mining services industry?
  2. The price in the mining industry depends on the: Type of ore Region involved Type of mining performed (surface or underground)
  1. What are the main saving levers of the contract mining services industry?
  2. According to Beroe’s analysis, the main saving levers are: Leasing/renting equipment use of technology and automation Fuel usage efficiency Improved mine planning
  1. Name the top global service providers in the mining industry?
  2. The top global service providers include the following names: Cimic Group Ltd. Downer EDI Ltd. Macmahon Holdings Ltd. Aveng Moolmans Redpath Group Eqstra Holdings
  1. Which two cost components influence the total costing within the mining industry?
  2. Following the insights from Beroe’s report, equipment costs nearly 50 percent of the total costing while labor costs (wages and benefits) approximately 20 – 25 percent of the total costs.
  1. Despite the weak commodity market, why is the global mining market expected to grow?
  2. Despite the weak commodity market, the global contract mining market is expected to grow since contract mining companies are preferring to outsource over new investments to minimize their capital spend and optimize their expenditure.
  1. Why are mining companies forced to concentrate on their core capabilities?
  2. As per Beroe’s report, changing mining conditions with an increase in mining activities, due to heavy equipment usage on account of a lower grade of mines, forces the mining companies to concentrate on their core capabilities like exploration, sales, and marketing.

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