This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 7/24/2018

Overview

The Australian mining industry dates back to the gold rushes of the 1850’s, making it one of the country’s most well-established sectors.  It is a major contributor to national GDP, typically accounting for around 7% of total GDP. The industry is strongly export-oriented, with minimal processing onshore, and since 2007-2008 mining has accounted for between 50 and 60% of total national exports.  Australia is a global top five producer of gold, iron ore, lead, zinc and nickel and also has the world’s largest uranium and fourth largest black coal resources, respectively.  As the fourth largest mining country in the world (after China, the United States and Russia), Australia will have ongoing demand for high-tech equipment, representing potential opportunities for US suppliers.

According to Geoscience Australia, in 2016 (latest available figures) there were over 370 operating mine sites across the country, of which approx. one third is located in Western Australia (WA), one quarter in Queensland (QLD) and one fifth in New South Wales (NSW), making them the three major mining states. By volume, Australia’s two most important mineral commodities are iron ore (29 mines) – of which 97% is mined in WA – and coal (over 90 mines), which is largely mined on the east coast, in the states of QLD and NSW. In contrast to most global production, the majority (around 75%) of black coal in Australia is produced from open-cut mines.  This ratio of 3:1 open-cut/surface to underground mines also applies to the broader (i.e. non-coal) local mining sector.

The Australian mining industry experienced an extended phase of strong growth from around 2005 to early 2013, during which there was significant investment and construction of major projects. Since 2013, there has been a clear shift in focus from construction to production and export.  This coincided with falls in major international commodity prices–particularly iron ore and coal–and lead to the delay/cancellation of some projects and a strong drive to cut operating costs.  With the improvement in commodity prices in the last two to three years, there have been signs of “green shoots” in the sector in terms of existing mine expansions and development of some new mines (albeit smaller operations than the large iron ore and coal mine developments of the last decade) e.g. Rio Tinto confirmed in the latter half of 2016 that it would spend over USD330 million to expand its Silvergrass iron ore operations in WA; BHP Billiton is expected to complete a USD200+ million expansion of its Caval Ridge coal mine in Central QLD; and there has been around USD370 million invested in the development of several lithium mines in WA in the last few years.

Major capital-type goods are typically imported and/or locally assembled by subsidiaries of foreign companies. An overwhelming majority of heavy/earth-moving equipment is imported.  Equipment imports peaked around 2011-2012 (coinciding with a ‘super-boom’ in the local mining industry and a period when the AUD was particularly strong), and fell away quite sharply from 2013-2016 when commodity prices were down.  Although it is unlikely to return to the highs of 2011-2012, there are however signs that demand for heavy equipment is picking up. The US is one of the largest exporters of mining equipment to Australia, with Japan, China and Germany being other important sources of imported equipment. Major players such as Caterpillar, Komatsu, Wirtgen, Joy Global and Liebherr have a strong presence in the market.  Smaller-scale local manufacturers cater to niche and specialized markets and are particularly competitive in mining-related software, fine coal cleaning and process control, and strata reinforcement technology.

Leading Sub-Sectors

One of the key opportunity areas for US exporters in the Australian mining industry is maintenance and service. Mining companies remain strongly focused on reducing operating costs so products and services that enhance or extend existing infrastructure, and improve the bottom line, are likely to be well-received. Heavy construction equipment and drilling equipment are also leading sub-sectors.

Opportunities

With the high cost of labor in Australia, there is strong interest in automation technology such as driverless vehicles (trucks and trains), drills and excavation equipment.  It is worth noting that this interest is strongest in the iron ore sector, where the large scale of mine operations justifies the investment in automation.  The Australian mining industry is, in many areas, an early adopter of technologies such as mobile and wearable technologies.

Historically, there have been numerous mining trade shows across Australia though some of these events have disappeared in the post-boom era.  The two largest events are:

AIMEX–Australasian International Mining Exhibition http://www.aimex.com.au which is held biennially in Sydney (NSW), next taking place 27-29 August, 2019.

QME–Queensland Mining & Engineering Exhibition www.queenslandminingexpo.com.au which is held biennially in Mackay (QLD), next taking place 24-26 July, 2018.

Web Resources

Australian Mining publication: https://www.australianmining.com.au/
Australasian Institute of Mining and Metallurgy (AusIMM):  http://www.ausimm.com.au
Australasian Tunnelling Society (ATS): http://www.ats.org.au
Australian Drilling Industry Association (ADIA):  http://www.adia.com.au
Australian Institute of Geoscientists (AIG):  http://www.aig.org.au
Geoscience Australia:  http://www.ga.gov.au/scientific-topics/minerals/mineral-resources
Minerals Council of Australia (MCA):  http://www.minerals.org.au
Mining & Energy Services Council of Australia (MESCA):  http://www.mesca.com.au
Office of the Chief Economist: https://www.industry.gov.au/about-us/our-structure/office-of-the-chief-economist (produces the Resources and Energy Quarterly publication)
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.