Industry Analysis & Industry Trends
Over the five years through 2015-16, the Iron Ore Mining industry's revenue is expected to decrease at an annualised 1.3% to $60.1 billion. Early in the period, strong economic growth in China increased iron ore mining development and drove greater steel production, fuelling demand for iron ore and contributing to high world iron ore prices. Following a large revenue decline in 2012-13 due to reduced Chinese demand, industry revenue rebounded in 2013-14 on the back of a weaker Australian dollar, higher output, low Chinese inventories and increased Chinese steel output.
However, 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. While year-to-year swings in capital spending are not unusual, the industry’s overall capital spending has decreased over the five years through 2015-16, as fewer new mines were developed, reducing demand for capital inputs.
To calculate the capital intensity level, IBISWorld uses data from the industry cost structure... purchase to read more