The global mining chemicals market is forecast to reach $25 billion in five years time due to growing demand for resources in emerging economies and due to the resurgence of feasiblity studies that were mothballed during the recession.
The mining industry has and will continue to remain an indispensable industry in the 21st century with economic prosperity and competitiveness critically hinged onto the level of mining activity. Mineral commodities are essential to modern industries and their omnipresent use in almost every walk of life is undeniable. All mined resources constitute vital raw materials for the production of a wide range of consumer/industrial goods. Steel, iron, aluminum, manganese, lime, for instance, are used in all the broadest of broadest applications, such as, aerospace, defense, electronics, consumer durables, engineered goods, construction, agriculture, manufacturing, transportation, utilities, communication among numerous others.
Coal, the most enormously valuable mineral/rock resource is indispensable with energy generation, despite all the hype about renewable energies. Coal continues to dominate world production of energy accounting for over a 30% share in the total energy produced worldwide. Like coal which is used to generate electricity to power the economy, oil and gas extraction/petroleum mining is also indispensable as fuel for vehicles. Petroleum also finds applications in the manufacturing of plastics, chemicals, medicines, fertilizers, and synthetic fibers, among others. Therefore all the segments of the mining industry (i.e. coal mining, oil and gas extraction, metal ore mining, nonmetallic mineral mining and quarrying) are forecast to witness secure growth in the upcoming years.
Mining chemicals play a vital role in enhancing the productivity and efficiency of mining processes such as recovery and extraction of minerals and target materials from the ore. Presently, Asia-Pacific and the United States dominate the world mining chemicals market. Explosives & drilling application represents the largest and fastest growing market for mining chemicals worldwide, with impetus for the segment expected to be provided primarily by the coal industry, which is presently the largest end user of explosives. On the other hand, market for mineral processing is expected to be dominated by precious metals industry such as copper, due to the importance of leaching and flotation in these markets. In upcoming years, legal and regulatory laws regarding environment and safety concerns are expected to propel investments in developing chemicals which are safer and environmentally friendly.
Production challenges and bottlenecks faced by the mining industry interestingly provide a business case for mining chemicals. For instance, growing demand for minerals, increased mining activities and the ensuing depletion of high-grade ore deposits, have necessitated mining companies to tap into lower quality ores. Continuous mining results in reducing the concentration of an ore, thus requiring additional energy and cost for mining and refining since deposits are harder to process, extract, refine, and process. This thereby requires the use of high quality, technologically advanced mining chemicals capable of maximizing recovery of mined minerals. Mining chemicals importance in the value chain is poised to grow stronger in the upcoming years as these chemicals evolve into being a fundamental element influencing profitability of mining companies as they increasingly begin to operate on larger surface mines. Also, increased R&D and investments in developing and commercializing newer, more sophisticated chemicals will gradually push currently cheaper yet less efficient and environmentally hazardous alternatives out of the market.
The 2007-2009 recession scarred the mining industry with large mining companies coming down hard and while smaller and medium sized companies witnessed closures as a result of jeopardized mining projects. Scaling back of production output, liquidity and credit shortages, muffled activity on the mergers and acquisition front as companies like Rio Tinto saddled with millions of pounds of bad debt deferred new investment plans, resulted in a stagnating business environment. In addition to shortages of refinancing facility, the lower commodities prices during this period impacted mining companies cash flows and their ability to self-finance capital projects thus impacting capex programmes. Closed mining townships directly impacted demand for mining chemicals. In addition, the Chinese governments decision to reduce the production of metallic products further compounded the industrys woes. Mineral commodities during the recession period witnessed hurting declines exerting downward pressure on commodity pricing. Reduced contribution of manufacturing activities towards a countrys overall GDP during this period exerted immense pressure on international consumption patterns. Marked declines in production of cars, consumer goods and heavy machinery eroded per capita consumption of mineral commodities. All of these factors combined to push growth in the world mining chemicals market into negative in the year 2009.
The year 2010 witnessed the market make a welcome recovery despite the blow suffered by Australias mining industry as a result of floods and natural disasters, which resulted in closures and decommissioning of several mines as a result of water logging. In the post recession period, revival of a large number of feasibility studies is forecast to add to the markets growth momentum. This re-initiation and launch of new feasibility studies will translate into dollar market opportunities in the medium term when the final execution phase generates demand for mining chemicals.
According to Global Industry Analysts, Asia-Pacific and the United States dominate the world mining chemicals market. Explosives & drilling application represents the largest and fastest growing market for mining chemicals worldwide. Coal mining constitutes the major end-use sector for explosives. Global industrialization and high prices of alternative energy sources is driving the demand for thermal coal, which in turn is bolstering the worldwide explosives market. Other end-use sectors include metal mining, quarrying operations and industrial minerals. Developing countries are expected to provide momentum for explosives sales in the next few years. Countries in the Pacific Rim and Latin America, where penetration levels are low despite rich metal and coal reserves, offer tremendous scope for explosives. Though US is the largest market for worldwide explosives in terms of value, regions such as Africa, Asia, Latin America and Russia are expected to witness higher growth rates in the upcoming years because of increasing hunt for minerals worldwide. Mineral Processing represents the second largest application for mining chemicals.
Major players in the global marketplace include AkzoNobel Cellulosic Specialties, Amcol International Corp, BASF, Cheminova A/S, Chevron Phillips Chemical Company, Dyno Nobel, Inc, FMC Industrial Chemicals, Nalco Company, Orica Limited, Sasol North America, Shell Chemical, among others.
The research report titled Mining Chemicals: A Global Strategic Business Report provides a comprehensive review of market trends, and recent industry activity. The study provides market estimates and projections in US$ Million for regions including the United States, Europe, Asia-Pacific, South Africa and Rest of World. End-use applications analyzed include Mineral Processing, Explosives & Drilling and Water & Waste Treatment, among others. ©Global Industry Analysts
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