Australian Market for Mining Equipment Forecasted to Remain Firm

Australian respondents expect their expenditure to be stable and expect that half of their expenditure will follow similar trend in 2016 as in 2015.
Outright purchasing leads the way and was the most common purchasing method

Ken Research recently published its report on “Purchasing Trends and Intentions for Mining Equipment, Parts and Consumables in Australia, 2016” which provides an in-depth analysis of the mining industry in Australia. It provides a comprehension of current acquisition for mining equipment and service providers in Australian mining sector. It also talks about the future acquisition for purchasing and spending trends in areas like plant and heavy equipment, equipment parts and components, drilling and blasting consumables, maintenance services and IT software.

On an average only 68% confirm a final decision regarding the purchase of a range of consumables and equipment at the mine site. Results show that as the size of the mining company decreases, these agreements become less frequent. Their biggest challenge is availability of parts, logistics and lead times, after-sales servicing and maintenance, and technical support. Outright purchasing is leading the way and is the most desired purchasing method. A general trend seen is that operation and maintenance is the favored contract designed for only heavy equipments purchased. The Australian mining industry remains gloomy as the prices for its three largest mined commodities iron ore, coking coal and thermal coal – all remained low throughout 2015 due to which its mining operations have continued to remain tight and continue to focus on cost-cutting to stay in global contention. The acquisition of mining practices is critical for mining equipment and service suppliers.

To have an insight into the issue, Timetric surveyed 100 mine makers, maintenance and procurement managers between October and December 2015. Respondents were asked to make changes in both spending and purchasing sector. This report also talks about the types of service contracts that Australian miners might prefer for heavy mobile equipment. The biggest challenge is faced by the buyers and decision makers in sourcing the right product. For any industry to set up, analysis of its location is crucial for decision making.

LionGold has interest in gold mining and exploration companies in Australia and Ghana. The Group’s wholly owned Australian subsidiary , Castlemaine Goldfields, produced approximately 45,000 ounces of gold in FY2015, contributing to SGD 73.0 million in revenue, LionGold through the process of acquiring gold mining assets is trying to be in the race of leading gold mining company. After the inexplicable crash of its share price in October 2013, LionGold’s Board took a step to re-strategize the Group’s portfolio of mining assets to rationalize, streamline and stabilize operations. Due to steady volatility that led to fall in gold prices, globally gold companies framed an expectation of high inflation, fall in value of assets and increase in development costs.

Key Topics Covered in the Report: