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 12.3% to reach $67.2 billion. Strong economic growth in large emerging nations, such as China and India, has lifted steel production, in turn fuelling demand for iron ore and boosting its price, even allowing for the fall in 2011-12. Rising prices have led to capacity expansions and large-scale increases in Australia's iron ore output. These factors have contributed to an estimated 11.3% annualised increase in Australia's iron ore production over the past five years.
Following a large revenue decline in 2012-13 due to price falls, industry revenue is estimated to rebound in 2013-14 by 13.6% to $67.2 billion on higher output and price increases... 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.
For each dollar invested in capital equipment, approximately $0.32 is required for labour inputs... purchase to read more