Industry Analysis & Industry Trends
Over the five years through 2014-15, revenue for the Iron Ore Mining industry is expected to increase at an annualised 13.5% to reach $83.9 billion. Strong economic growth in large nations, such as China and India, has increased steel production, fuelling demand for iron ore and boosting its price over most of the past five years. Rising prices have led to capacity expansions and large-scale increases in Australia's iron ore output, particularly between 2011-12 and 2014-15.
Following a large decline in 2012-13 due to falling prices, industry revenue rebounded in 2013-14 by 25.2%, on the back of higher iron ore output, low iron ore inventories in Chinese ports and increased Chinese steel output. This was despite low prices in January 2014 and in 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 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 grown substantially over the five years through 2014-15, as new mines and mine expansions came onstream to meet rapid growth in iron ore demand from China.
To calculate the capital intensity level, IBISWorld uses data from the industry cost structure... purchase to read more