Industry Analysis & Industry Trends
Contract miners provide services to mining companies to support mining production. Demand for industry services is driven by the relative cost and output advantages that mining companies derive from outsourcing these processes, compared with controlling production in-house. Contract miners typically have access to a large pool of mining machinery and equipment, and skilled employees to meet client needs. The strength of Australia's Mining division is a crucial factor in determining industry performance.
Over the past decade, demand for commodities has been strong, particularly from markets in China and other export destinations. During periods of strong demand, mining companies (the industry's client base) tend to shift focus towards planning new capacity... purchase to read more
Industry Report - Industry Investment Chapter
The industry has a medium level of capital intensity. The industry's revenue stream depends heavily on supplying both workers and equipment for mining operations. Increased participation in underground mining operations, which are typically more labour-intensive than open-cut mines, has tended to dilute capital intensity over the past five years. This trend is expected to continue over the next five years as industry wages are forecast to increase at a steady rate.
To calculate capital intensity, IBISWorld uses data from the industry cost structure. Depreciation is used as a proxy for capital and wages are used as a proxy for labour. In 2015-16, depreciation is estimated to account for 5.6% of industry revenue, with wages estimated at 32.7%... purchase to read more