Global Market Outlook on Heavy Mining Equipment

  • APAC will continue to dominate the HME market in terms of size and growth prospects until 2020
  • The global HME is expected to grow by 3–3.5 percent CAGR between 2017 and 2019, owing to the rise in mineral production output, improving economic scenario in China, and increase in commodity prices

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  • Key end-users such as coal production is expected to increase by 1.5-2.5 percent CAGR during 2017–2019, while metal production is expected to increase by 2–3 percent during the same period
  • Due to a fall in ore grades at the surface level, mining companies are exploring opportunities to implement UG mining methods. Thus, growth of UG mining equipment is expected to surpass surface mining equipment’s market growth
  • Global economic growth, expected increase in exploration activity in brownfield operations and mechanization of mines could further drive the demand for HME

Global Demand by Application

  • Demand growth is expected to come from metals such as copper, nickel, zinc, and iron ore. Metal output is expected to increase by 3-3.5 percent CAGR between 2017 and 2019
  • Demand is also expected to come from regions such as India, China and Africa. For instance, iron ore output in India increased by 9 percent in 2017–2018 compared to same period a year ago. This trend is expected to continue in the upcoming years

Downstream Demand Outlook

  • Demand for HME is expected to improve due to the increase in metal production, construction activities, and upsurge in new mines
  • In the UG mining equipment category, coal accounted for about 40 percent of the revenue share in 2018
  • Coal mining is one of the significant end-use industries in the surface mining equipment category
  • Asia is going to be the fastest growing regional market for HME during 2018-2020
  • Demand from key developing countries such as India, China and Indonesia could increase the size of the market

Industry Drivers and Constraints

Drivers

Increase in Mining Activity :

  • A gradual increase in mining activities in the key global markets such as India, Indonesia and China will drive up the demand for HME
  • Due to depleting ore grades in surface mines, mining companies are adopting UG mineral extraction methods. This leads to an increase in underground mining activities, and thus increase in demand for underground mining equipment

Rise in Commodity Demand

  • A gradual rise in key mining commodities demand, triggers the mining companies to increase the production level which will drive up the demand for HME

Commodity Prices

Higher commodity prices result in high profit margins for mining companies, which triggers greenfield and brownfield mine project expansions and thus, demand for HME

Constraints

Slow Down in Chinese Economy

  • Slowdown in the Chinese economy has adversely affected the global mining market, thereby deteriorating the demand for HME

Resource Nationalism

  • Resource nationalism poses the threat to mining companies and OEM manufacturers alike. Resource nationalism is a potential risk in various regions, including Canada, and is a constraint against capital investment adversely impacting HME suppliers