Just as numerous industries suffered in the great recession, so did surface and underground mining, and, consequently, mining equipment. But that was then, and this is now. The industry has reclaimed territory, and investors are taking notice.

That being said, while the winds of fortune may be blowing again, hard facts are always preferable over a weather vane. Here are some numbers on growth drivers and investment opportunities around industrial mining equipment.  

Mining Industry Background

• Understanding the mining industry’s primary focus is straightforward: extracting ores and valuable minerals for multiple uses.  Mining is conducted either on the surface or underground. Within the underground mining segment, equipment can be subcategorized into different products and applications. 
• Products: Mining drills and breakers; mineral processing machinery; crushing, pulverizing and screening equipment, and others. 
• Applications: metal mining, coal mining, mineral mining and processing, and others.

The applications are practically infinite – look around you. Most of the objects in your room likely contain resources that came from underground mining. Mined materials such as iron ores are the raw material used to make pig iron – one element for making steel for use in construction, transportation, manufacturing and many consumer products; coal, still one of the largest mining markets, produces energy in its most common form, although highly specialized forms generate by-products used in high quality medical instruments, cell phones and solar panels (see “Why Pay Attention to Blue Gem Coal?”).   

Copper has a wide variety of uses, including electric cables and wires, plumbing and heating, and alloys (bronze and brass), etc. Not to mention nickel, bauxite, limestone, granite, copper, slate, salt and sand. And then there are minerals such as muscovite that can be used in windows; zinc produces tin; and so on.  Precious and semi-precious metals, such as gold, silver, platinum (and copper) are used both in industrial applications and sold as ornaments.  

Global Equipment Market 

The global mining equipment market is led by metal mining, followed closely by the coal industry and mineral mining. 

Grand View Research, “Global Mining Equipment Market Size, Share, Forecast Report, 2025,”
https://www.grandviewresearch.com/industry-analysis/mining-equipment-industry  

Overall, the mining industry can be divided into the following regions:  

• Americas: Canada, US and Mexico
• Europe and the Middle East
• Asia-Pacific region (“APAC”), 21 countries including China, India, Indonesia and Australia.   

Global mining equipment demand in 2019, by region (in million U.S dollars) 

Source: Report Buyer
“Mining Equipment Market Size, Share & Trends Analysis Report by Product, by Application and Segment Forecast, 2018 – 2025”

This chart represents the estimated global mining equipment demand in 2019, sorted by region. Note the outsized share of the market by APAC.  It doesn’t surprise, when you learn that it produced more than half of the world’s iron ore, more than 70% of its copper, nickel, silver, lead, zinc, bauxite and tin, and more than 90% of its coal and molybdenum in 2014.¹  China, the largest APAC contributor, witnessed a doubling of mining equipment sales between 2009 and 2014 and rapid increases in construction, manufacturing output and government support of the mining industry is projected to continue to drive significant growth.²

Mining Market Growth 

From the moment that the world reacted to the global credit crisis, through the middle of the next decade, volatility in commodity prices, postponement (or cancellation of) infrastructure projects, reductions in manufacturing output and construction, and falling consumer demand all contributed to a fall in investment into mining machinery.³ 

However, since that time, the market has grown, albeit slowly. In 2012, it totaled $71.5 billion; in 2017, it had expanded to $75.6 billion.⁴ While industry studies differ about the projected market size, it is expected to grow significantly to between $128 billion⁵  in 2025 and $155 billion in 2022.⁶ 

Projected Growth in the U.S. Market

The U.S. market shown below is projected to continue to rebound and to grow steadily for the next seven years, according to one study between 2017-2025.  

 Source: Grand View Research
“Global Mining Equipment Market Size, Share, Forecast Report, 2025”  

Breaking the market by type of equipment, surface mining equipment in 2012 constituted the largest segment, constituting 37% of the market, followed closely by the underground market.⁷

Within the underground market, underground mining equipment includes hydraulic shovels, cable shovels, continuous mining machines, long wall mining machines and drag lines.⁸  Underground mining, e.g., coal mining, utilizes specialized miners, among other heavy equipment, called long-wall miners.  

“The long wall extraction segment dominates the global underground mining equipment market with 73.48% of share in 2016, in terms of value. It is expected to show highest growth at a CAGR of 7.21% during the forecast period” (2018-2022).⁹

Of note, mining drills and breakers are expected to be the fastest growing segment of the underground mining sector.¹⁰

Industry Growth Drivers

Economic Vitality – Macro Trends

Worldwide demand for commodities continues to rise with population growth, the rise in construction spending and manufacturing output, improved living standards and a corresponding increase in consumer disposable income.¹¹  And, despite the increased availability (and use of) clean energy solutions – and falling costs for the same — there still is increased demand for non-renewable resources such as coal and petroleum.¹² See “How to Navigate the Landscape of Investment Options in Renewable Energy”) for a discussion about clean energy solutions. 

In the developed countries, renewed vigor in the residential and commercial construction industries and demand for infrastructure building (like roads and bridges), stronger world economies and higher consumer confidence are all contributing to growth in the mining equipment sales projections.¹³ In developing countries, large iron ore mining projects have been outlined in Brazil and Africa, as well as in Russia and Australia, driving the demand for technically advanced solutions.¹⁴

Technologic Progress

“Furthermore, the supportive regulations and policies by the government regarding mining safety, employment, environment and equipment usage have fueled the demand for underground mining equipment in the U.S.” ¹⁵

Just as we’ve witnessed in the oil & gas exploration and development industry (see “Oil and Gas Forecast”) innovative technology has improved the industry’s ability to identify, map and extract deposits.  Digital mining solutions, automation technology and robotics (whose costs have been falling), many of which use the Internet of Things (IoT), Computer Aided Earthmoving Systems (CAES), automated vehicles, drones and wearable technologies, remote controlled mining equipment and remote monitoring of mining equipment have all enabled mine operators to improve efficiency and reduce the cost of delivery per unit. 

Potential Market Growth Limitations

There are several factors that may constrain some of the projected growth. Commodity prices, as noted in the previous chart, have been rebounding in the last several years. Projections, however, are not uniform. 

Source: World Bank, “Commodity Markets Outlook,” October 2017 

These same stringent government regulations that are driving demand for underground equipment, however, also contribute to higher mining costs. At the same time, availability of skilled personnel to handle automated equipment, as well as high equipment maintenance costs are expected to be a limiting factor. Furthermore, as the quality of ore erodes or as ore deposits are depleted, miners are moving to less accessible and more demanding locations, so investment costs are rising – both constraints on the mining industry. Finally, recent institution of tariffs will add another layer of complexity to the industry.  

The effect of these constraints, nevertheless, is changing the approach the industry is taking. The technology is rapidly evolving, and operators are driving the industry to become more efficient.  

All in all, the trend to more sophisticated tools, supported by the increased use of coal for heating and electricity generation and construction of roads and railway tracks through difficult terrain, present opportunities for growth.¹⁶

Conclusion 

The global rebound from the Great Recession has spurred growth in this industry. Rapid urbanization, growing consumer demand for products, rising construction, transportation, and manufacturing, and increased consumer disposable income are all contributing factors to positive projections in this industry. Digital mining solutions have accelerated and changed the industry – increasing mine safety, decreasing costs and increasing profits. With vendors’ R&D budgets climbing, the industry seems to be on a positive glide path for the foreseeable future.¹⁷ And there are mining investment opportunities waiting for the well-informed investor.  

1. CRU International, Ltd., “Asia-Pacific mining sector study,” September, 2014
2. The Freedonia Group, “World Mining Equipment: Industry Study with Forecasts for 2019 & 2024,”, Nov 2015
3. Grand View Research, “Global Mining Equipment Market Size, Share, Forecast Report, 2025”, April 2018
4. Polaris Market Research, “Mining Equipment Market by Type, By Product and By Application Market Size and Forecast 2018-2026,” September 2018
5. Grand View Research, “Global Mining Equipment Market Size, Share, Forecast Report, 2025”, April 2018
6. Allied Market Research, “Mining Equipment Market By Equipment Type, and Application – Global Opportunity Analysis and Industry Forecast, 2015-2022,” 2015
7. Mining.com, “Global mining equipment to reach $117 billion by 2018: report,” February 2013
8. IBID
9. KenResearch, “Global Underground Mining Equipment Market Research Report-Forecast 2022”, Sept 7, 2018
10. Allied Market Research, “Mining Equipment Market By Equipment Type, and Application – Global Opportunity Analysis and Industry Forecast, 2015-2022,” 2015
11. The Freedonia Group, “World Mining Equipment: Industry Study with Forecasts for 2019 & 2024,”, Nov 2015
12. Polaris Market Research, “Mining Equipment Market by Type, By Product and By Application Market Size and Forecast 2018-2026,” September 2018
13. Report Buyer, “Mining Equipment Market Size, Share & Trends Analysis Report By Product, By Application And Segment Forecast, 2018 – 2025,” April 2018
14. Transparency Market Research, “Mining Equipment Market – Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2012 – 2018,” 2018
15. Market Research Future, “US Underground Mining Equipment Industry – Forecast to 2022” , Nov 2016
16. Allied Market Research, “Mining Equipment Market By Equipment Type, and Application – Global Opportunity Analysis and Industry Forecast, 2015-2022,” 2015
17. Grand View Research, “Global Mining Equipment Market Size, Share, Forecast Report, 2025”, April 2018