Industry Analysis & Industry Trends
Over the five years through 2016-17, the Iron Ore Mining industry's revenue is expected to decrease at an annualised 5.4%, to $52.1 billion. Early in the period, strong economic growth in China increased iron ore mining development and drove greater steel production. This fuelled demand for iron ore and contributed to high world iron ore prices. Industry revenue declined in 2012-13, due to higher global iron ore supply and reduced Chinese demand. However, it rebounded in 2013-14, on the back of a weaker Australian dollar, higher output, low Chinese inventories and increased Chinese steel output.
Iron ore prices (denominated in US dollars) started falling in mid-2014 due to a global oversupply... 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 economies of scale, which minimise marginal costs and maximise profit.
For each dollar required for labour inputs in 2016-17, approximately $0.94 will be invested in capital plant and equipment during the year. The industry's overall capital spending has increased over the five years through 2016-17, as new mines were developed or existing ones were expanded... purchase to read more