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Majority of miners in Europe expect expenditure to be level

Published by
World Coal,

Timetric conducted a survey and asked respondents if they expected their expenditure to increase, stay the same, or decrease. The majority of respondents anticipate stability within their expenditure.

A large proportion of respondents foresee spending to be flat: 63% for ‘explosives, blasting materials and chemicals’; 60% for ‘maintenance services’; 58% for ‘equipment parts and components’; and 56% for ‘plant and heavy equipment’. The largest part of the stability is from regions producing particularly depressed commodities, for example the Polish coal industry.

Other regions such as Western Europe will also record stable or declining expenditure, due to their mining industries having developed with few low-cost deposits available.

There are distinct differences within the results when they are divided into commodity type. Commodities, which have seen downward trends in pricing over the last two years, have more negative responses compared with those where commodity prices are more steady or strong. For instance global thermal coal prices – Europe’s production of coal consists primarily of thermal coal – have decreased since 2011. With a continual downward trend in prices, it is likely coal mines will encounter the least investment in expenditure, as prices are below an investment-inducing level.

Dissimilarly, respondents from precious and base metal mines were more inclined to expect an increase in expenditure over 2015. Despite prices for metals such as copper, lead and gold, having fallen, they have been considered more stable over the last two years.

Adapted from press release by Harleigh Hobbs

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