Canada and The United States are posting great financial numbers and using this time and cash to further expand and upgrade operations. Analysts are bullish on the continued recovery and have a positive outlook for 2019 and beyond.
Mining is back, and it’s planning to stay for a while.
Mining companies of all sizes are seeing an upswing in their revenue and bottom-line profits. Large mining companies such as Rio Tinto, Freeport-McMoRan and Anglo-American reported solid earnings, increasing profit margins and significantly improved cash flow for FY2018. The recovery started back in 2016, has continued for the last couple years, and looks to extend well into the future. Healthy macroeconomic fundamentals, hefty reserves and recent deregulation jump started the sector from its previous slump.
Mining companies are currently profiting from nickel, lead, copper, tin and gold while traditional materials such as coal show signs of stability in North America. The current administration continues to take several actions to help save the U.S. coal industry, their attempts to “save coal” have been a positive sign for those companies that operate in the coal industry.
The mining equipment market will grow with the mining recovery.
Mining companies aren’t the only ones benefiting from the recent recovery. The positive outlook from analysts is extending to the Mining Equipment Market as well. Back in 2016, the global mining equipment market size was valued at USD 120.82 billion, but the latest analysts’ predictions estimate a CAGR of 11.7% that will boost the global mining equipment market to USD 284.93 billion by 2025 according to a recent Grand View Research report.
With such enormous growth projections, mining companies of all sizes in Canada and The United States are taking this opportunity to scale their fleets and improve their machinery to meet the upcoming demand. Mining companies are retrofitting and refurbishing their current equipment to better position themselves to increase drilling, extraction and exploration activities over the coming years. Others are purchasing new and used mining equipment across North America at a rapid pace, which is creates a huge opportunity for lenders that offer mining equipment financing.
Optimistic but careful at the same time.
It’s true that the forecast and outlook for mining in North America remains positive, but it’s important to not forget mining companies will still struggle with problems they have always faced. Issues such as tension over water usage from local communities, political unrest in countries of operation and trends away from coal and fossil fuel to alternative energy sources will always pose a threat to profits and sustained growth.
The mining industry expects to see success well into the future.
Although there are the risks mentioned above, this still doesn’t overshadow the positive trends we’ve seen and expect to see going forward for the mining industry. Analysts anticipate the trends that started back in 2016 to continue for the remainder of 2019 and well into the future.