Contract Mining Services Market Intelligence

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  • Unlimited updates on the Report*
  • Supplier Watchlist for 3 suppliers*
  • Supplier Shortlisting Tool*

With this purchase you will be subscribed for a 12-month PRO membership to the upcoming all new Beroe LiVE (launching in Q3, 2020)

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*These features will be unlocked on the new Beroe LiVE when it launches (Q3, 2020)

Report Coverage

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

Market Size

CAGR

3-4 Percent

Market Size North America

$ 1.67 Bn

Table of contents

  1. Contract Mining Services Executive Summary
  2. Category Landscape
  3. Regional Landscape
  4. Supply Landscape
  1. Contract Mining Services Market Analysis
  2. Global Market Maturity
  3. Market Overview, Size and Trend
  4. Segmentation by end-use and Region
  5. Regional Market Outlook
  6. Australia
  7. Africa
  8. North America
  1. Contract Mining Services Industry Analysis
  2. Global Porter’s Five Force Analysis
  3. Market Drivers and Constraints
  4. Industry Risk Analysis
  1. Contract Mining Supply Analysis
  2. Supply Market Outlook
  3. Supplier Market Share
  4. Supplier Profile
  5. SWOT Analysis
  1. Contract Mining Services Cost Analysis with Savings levers
  2. Cost Structure Break-up
  3. Cost Driver Trends and Impact
  4. Cost Saving Levers
  5. Risks Associated with Contract Mining Companies
  1. Contract Mining Services Contract structure & Best Practices
  2. Contract Mining Structure
  3. Mining Contracts Types
  4. Supply Chain Analysis
  5. Value chain Mapping
  6. Regulatory Scenario

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Global Market Outlook on Contract Mining Services

  • High demand for contract mining, coupled with advanced technology and work force from Australia, will provide the impetus to contract mining market, in terms of growth prospects, until 2018
  • 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 the fall in commodity prices. This has adversely affected the miners, thereby affecting the demand and profit margins of contractors

contract-mining-market-size

 

  • The global contract mining market is expected to grow despite the weak commodity market, as mining companies are preferring outsourcing over new investment 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 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 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

Drivers

Lower, defined mining costs

  • Reduced capital expense for 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

Constraints

Slump in demand for commodities

  • Fall in commodity prices, as a result of 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 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 of contract workers

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 percent, average commodity prices for the rest is expected to decrease by an average of 3-4 percent 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 high demand for raw materials
  • Late 2013 and 2014 witnessed a slowdown in mining, resulting in the reduced demand for HME
  • Again, 2014–2015 witnessed reduced demand; however, it is expected to 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 same period in the previous year

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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