Mining Industry Records Strong Growth

North America as a whole and specifically The United States is seeing positive growth trends continue in the mining industry and the outlook for 2019, and beyond, appears to be positive as well.

Mining industry recovery looks to stay on track.

Large diversified miners such as Rio Tinto, Freeport-McMoRan and Anglo-American reported strong earnings and consistently increasing profit margins and cash flow for FY2018.  The “recovery” of the mining industry can be traced back to FY2016 where robust macroeconomic fundamentals, large reserves and deregulation under President Trump kickstarted the sector from its previous decade slumber.

The recent successes have mainly been attributed to the mining of nickel, lead, copper, tin and gold while historically traditional materials such as iron and coal remain stable throughout the United States and Canada.  Although the Trump Administration continues to take several actions intended to help revive the U.S. coal industry, their repeated attempts to “save coal” have been a struggle up to this point. However, the industry as a whole is definitely trending upward. 

Expect to see significant growth in the mining equipment market.

The positive outlook for the mining industry is also spilling over into the Mining Equipment Market as well.  Just two years ago, the global mining equipment market size was valued at USD 120.82 billion, but with an anticipated CAGR of 11.7%, analysts are forecasting the global mining equipment market to hit USD 284.93 billion by 2025, according to Grand View Research.

With such significant growth projections, both large and small mining companies are ramping up and looking for ways to scale their fleets to meet the upcoming demand.   Companies are purchasing equipment and retrofitting current machinery to increase drilling, exploration and extraction activities across the globe over the coming years, which is good news for lenders that finance mining equipment.

Although trends look good, there are possible risks.

Even though the forecast and outlook for Canada and The United States mining remains positive, mining companies will continue to struggle with tension over water usage from local communities, political uncertainty across the globe and the movement toward clean energy and business practices that will continue to impact the coal mining industry. 

In Conclusion. Even though there are risks, the overall forecast for the mining industry looks stronger than it has in years.  Building on a two-year recovery, the mining industry and the mining equipment market will continue to see extensive growth for the remainder of 2019 and well into 2020.