Industry Analysis & Industry Trends
Over the five years through 2013-14, revenue for the Iron Ore Mining industry is expected to increase at an annualised 14.6% to reach $81.1 billion. Strong economic growth in large emerging nations, such as China and India, has lifted steel production, fuelling demand for iron ore and boosting its price over the past five years. Rising prices have led to capacity expansions and large-scale increases in Australia's iron ore output, particularly from 2011-12 through 2013-14.
Following a large revenue decline in 2012-13 due to price falls, industry revenue is forecast to rebound in 2013-14 by 32.4% on higher iron ore output, low iron ore inventories in Chinese ports, and increased Chinese steel output. This is despite lower prices in January 2014 and subsequent months... purchase to read more
Industry Report - Industry Investment Chapter
The Iron Ore Mining industry is highly capital intensive, as illustrated by the large share of depreciation as a proportion of industry revenue. Significant capital costs are required for heavy earthmoving equipment, buildings, vehicles and transport networks. Companies are required to invest major funds into these areas to achieve scale economies, which minimise marginal costs and maximise profit. While year-to-year swings in capital spending are not unusual, the industry's capital spending has grown substantially over the five years through 2013-14 as new mines and mine expansions came onstream to supply rapid growth in iron ore demand, particularly from China.
To calculate the capital intensity level, IBISWorld uses data from the industry cost structure... purchase to read more