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Mining rental and repair markets to grow to 2020

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World Coal,

The mining equipment rental market in Australia will grow to 2019 – 2020 after a tough couple of years for the sector, according to a new report from Frost & Sullivan, but margins will be tight and rental companies will be forced to diversify away from a reliance on mining.

"Prices for many mined commodities began declining considerably in 2013 and markedly since mid-2014 as a dual result of substantial increases in production coinciding with suddenly softer markets,” explained Mark Dougan, Managing Director, Australia & New Zealand, Frost & Sullivan. “This led to a significant decline in mining investment, which directly impacted the market for equipment rental, as it is exposed to the construction phase of mining operations. Consequently, rental equipment utilisation rates have fallen significantly and rental prices have been impacted by cost control measures from major miners."

In contrast, the mining equipment repair market has continued to grow over the past two years as a result of the very sizeable increase in the equipment base between 2012 and 2013 – and will continue to grow over the next five years.

“A good portion of the mining equipment repair and maintenance market is spent on earthmoving and extracting equipment,” continued Dougan. “Expenditure is forecast to increase by 2019 – 20, propelled by increased mine production and the growing maintenance requirement of equipment installed during the investment boom.”

As of 2015 Australia has a total of 420 operating mines for gold, coal, iron ore, copper, nickel and others, with mining accounting for about 10% of the Australian economy. The mining industry also supports a large mining equipment, technology and services (METS) sector, which employs about double the number the workforce of the mining industry itself.

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