Global Underground Mining Market: Key Highlights
· Theglobal underground mining market wasvalued at ~US$ 21.5 Bn in 2018, and is anticipated toexpand at a CAGR of ~2% during the forecast period.
· Based onequipment, the drilling equipment segment accounted for a major share of theglobal underground mining market in 2018.
· In termsof method, the unsupported segment held a significant share of the globalunderground mining market in 2018. Room-and-pillar mining is an oldmethod applied to horizontal or nearly horizontal deposits. This method hasbeen refined over the years, and is used in coal and non-coal mining.
· In termsof operator, the contract mining segment constituted a key share of the globalunderground mining market in 2018. Several contractual agreementsare used in contract mining. These can be broadly classified into traditionalcontracts, risk sharing contracts, and strategic alliance contracts, dependingupon the mine life or duration of the contract.
· LatinAmerica is estimated to offer high growth potential to the underground miningmarket in the next few years. Abundance of mineral resources and significantinvestments from mining companies are driving the underground mining market inthe region.
Key Drivers and Restraints of Global UndergroundMining Market
· Therenewable energy sector is expanding at a significant pace across the globe.However, it is unable to meet the rising demand for power. This has resulted ina chasm between the demand for power and its generation, which developingcountries such as China, India, and Indonesia are striving to meet throughcoal-based generation. This is driving the use of coal in power generationapplications. According to the World Coal Association, coal accounted forapproximately 38% share of the total electricity generated in 2018.This percentage has remained almost unchanged in the last 20 years. Thus, risein the demand for power is expected to boost the demand for coal in the powerindustry. This is likely to drive the underground mining market. Coalproduction in the U.S. increased to 273 million short tonsthrough underground mines in 2017, up from 252 million shorttons in 2016.
· Implementationof IoT in underground mining provides several opportunities to companies toincrease their productivity. IoT enables data integration from an increasingnumber of sources. This enables mining companies to plan their miningoperations with accuracy.
· Companiesrequire skilled professionals with technical skills, high degree ofproblem-solving, and considerable understanding of such tools and machines towork with technologically-advanced tools and machines. According to a survey bythe Associated General Contractors (AGC) of America, Inc., in January2017, 73% of businesses faced difficulty in finding skilled workers,and 55% businesses identified worker shortage. Thus, dearth ofskilled labor is hampering the implementation of smart mining methods. This isadversely affecting the underground mining market.
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Latin America Offers Lucrative Opportunities toGlobal Underground Mining Market
· LatinAmerica dominates the global underground mining market. The mining industry inthe region has been thriving since the last few years. In 2017, 305companies invested US$ 2.38 Bn for exploration in the region.Chile, Peru, and Mexico received 25%, 22%, and 21% ofthese investments, respectively, in the year. Favorable government policies andautomation of processes in excavation operations are anticipated to drive theunderground mining market in Latin America during the forecast period.
· Currently,Brazil has more than 180 active mines. The most productive underground mines inthe country extract up to 1,000,000 tons of minerals every year. Currently,Brazil has two major underground mines: Morro Velho and Serra Grande Gold Mine.
· Chile isa prominent producer of copper in Latin America. It produces 32% ofcopper in the world. According to Cochilco, Chile's state copper agency, thecountry produced its largest volume of copper ever (i.e. 5.83 million tons)in 2018, up by more than 6% of that produced in 2017.
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Global Underground Mining Market: Key Developments
· In April2019, Epiroc Australia and Mobilaris announced that it had been contractedby OZ Minerals to deploy the Mobilaris Mining Intelligence informationmanagement system for digitization of one of its underground operations. Thisdigitalization aims to increase production, efficiency, and safety in OZMineral’s new Carrapateena underground mine in South Australia.
· In September2019, Sandvik Mining and Rock Technology launched the new Sandvik RDX5 rockdrill to complement its rock drill offering for underground drill rigs. The newRDX5 rock drill is a strong replacement for the established HLX5 rock drillmodel in Sandvik’s drilling equipment, which has a heritage and longstandingreputation of being the most reliable rock drill in the world.
· In November2018, West African Resources awarded an underground mining contract for theM1 South deposit at the Sanbrado gold project in Burkina Faso to Byrnecut. Thecontract, worth US$ 110 Mn over five years, is Byrnecut’ssecond in the West African country.
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Underground Mining Market: Competition Landscape
· Theglobal underground mining market is highly fragmented, with the presence of alarge number of players.
· Highcapital investments in facilities, equipment, technologies, and transportvehicles poses a high barrier to the entry for new players in the globalunderground mining market. Regulatory pathways for clearance and approval ofunderground mining are time-consuming and capital-intensive. This createsanother barrier for the entry of new players into the market.
· Keyplayers operating in the global underground mining market are BHP, RioTinto, Glencore, Vale S.A., Alcoa Corporation, Coal India Ltd, Anglo AmericanPlc, Barminco, CIMIC Group Limited, OZ Minerals, The Redpath Group, ThyssenMining, China Shenhua Energy Company Limited, Norilsk Nickel Group, ImplatsPlatinum Limited, Amur Minerals Corporation, GBF Underground Mining Company,and Freeport-McMoRan.
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