Energy Saving Mining Equipment Driving Demand
July 11, 2014
According to a new report by analysts at TechNavio, the mining industry is poised to grow at a CAGR of 8.08 percent over the next five years. The optimistic outlook is based on an increase demand for mining equipment fuelled by an increase in overall global mining activity.
The forecast sites specific mining minerals as the main reason for growth. These include bauxite, platinum, iron ore, copper, sands, coal and gold. The countries that are expected to help lead the mining surge include Russia, China, India, South Africa, Brazil and Canada. Analysts believe the industry could reach $117 billion (USD) by 2018 if mining companies take advantage of energy efficient mining equipment.
Mining for metals and oil and gas require significant amounts of energy and by bringing these costs down with mining machinery that is energy efficient, mining companies can spend less and earn more. Energy efficient mining equipment can also be used for washing, transportation, screening processes and excavation. Estimates put energy costs at mining operations at 10% to 15% of the production cost and anything that can lessen those costs will be in demand in the coming years.
Companies that are involved in developing more energy efficient mining equipment include Caterpillar Inc., Komatsu, Joy Global and Metso Corp. Engineers at these companies are focusing efforts on producing mining equipment that uses less energy than previous machines but still delivers the same results. Analysts say the one factor that could possibly hinder the growth of this market is investment capital since new product development is expensive.