Australia is recognised as the world leader in mining equipment, technology, and services (METS) across many different commodity segments and technology platforms. As the second-largest centre of exploration just behind Canada, this is hardly a surprise.
The mining and METS sectors combined contribute an estimated 15% of Australia’s GDP, creates more than 1.1 million jobs, and supports many regional and remote communities. Of those jobs, METS businesses employ 300,000 people directly.
As Australia’s resources sector evolves, it remains at the forefront of global mining excellence within all facets, setting benchmarks for other countries and industries to follow.
In a four-part METS Insight: State of Mining Review series being published over the coming days, Mining.com.au explores some of the important trends from 2024 that are shaping the industry heading into 2025.
Ahead of the International Mining and Resources Conference (IMARC) in Sydney on 29-31 October, the series covers the whole spectrum of the market – from executives of billion-dollar listed companies to privately held startups trying to get a foothold in the industry.
Slight dip in road ahead
Australia’s resources sector, while dynamic, is a complex landscape to navigate. Although it’s a major centre of exploration, allocations dipped slightly to $2.2 billion in 2023, which caused a temporary 29% reduction in drillholes to 18,196, according to Hays Mining Industry Report Australia FY24-25.
Simultaneously, global economic uncertainty, evolving energy markets, alongside commodity price and demand fluctuations, as well as heightened expectations in terms of environmental, social, and governance (ESG) policies, are ramping up pressure for companies and their employees to perform better and deliver more.
Digging deep into the challenges and opportunities that lie ahead for the country’s thriving mining sector, the Hays report suggests despite the slowdown in drilling, the search for new mine sites is expected for decades to come.
Considering all this, where are the mining and METS sectors heading?
Speaking to Mining.com.au on the current state of the METS market, Regional director for Hays North Queensland, Ged Welsh, expects to see an increase in exploration activities although accessing finance for some miners will impede some operations coming online.
“As we move into 2025, we anticipate the biggest drivers of vacancy trends in the hard rock mining sector to be the prices of copper and gold”
“As we move into 2025, we anticipate the biggest drivers of vacancy trends in the hard rock mining sector to be the prices of copper and gold. Government and political influence on new mine leases will also play a significant role,” Welsh tells this news service.
“On the West Coast, we expect to see an increase in exploration activities compared to the past five years, along with a general improvement in conditions.
“However, mid-sized miners will need substantial financial backing to initiate new operations. In the coal sector, we don’t foresee any major changes in investment patterns.”
Welsh believes the skills labour shortage will continue to affect the sector heading into 2025.
While part four of this series addresses talent acquisition issues in greater detail, resources companies are experiencing a talent squeeze with 71% of mining leaders finding the talent shortage is impeding them delivering on production targets and strategic objectives.
A McKinsey & Company report suggests if Australia decides to convert all of its spodumene to lithium hydroxide, nearly 4,000 additional workers will be required to operate Western Australian plants by 2030 alone.
bucket segment and bucking the trend
Despite the ongoing labour woes and contraction in global exploration activities, diversified industrial technology company Imdex (ASX:IMD) managed to achieve record revenue of $445.3 million during FY 2024.
In an interview with Mining.com.au when the results were released, CEO Paul House said the medium to long-term view of the METS sector looked extremely attractive.
“The underlying demand for metals is expected to increase. Reserves are being depleted in every commodity everywhere around the world, so if we are to meet whatever demand looks like for each of those commodities we actually have to prove up more reserves,” House said.
“To prove up more reserves a company can fix that by M&A in the short-term but overall for society – or for the sector as a whole – you actually need to drill more holes. We need to increase exploration as an overall construct.
“Overall exploration leads to overall development, overall development is good for every participant in the mining services sector. I think in the short term – and this is between cost pressures and finding ways to improve is the near-term challenge.”
The vagaries of the market tend to hit smaller companies harder – and more often. Mill relining systems original equipment manufacturer Russell Mineral Equipment (RME) is bucking the trend and remains optimistic about the prospects of the market.
Company director Cherylyn Russell tells Mining.com.au that in order to thrive the attention of METS companies like Russell Mineral Equipment need to be aligned with the industry it serves.
“Consequently, we see the need for continued attention across four key areas – connected technologies, like digital, data analytics and automation to drive improved safety and environmental outcomes, as well as increasing productivity, ESG and accountability focuses, ever-increasing and improving levels of predictive service, collaboration and customer experience, and finally, talent growth, management and retention,” Russell tells this news service.
“RME is a highly-deliberate business. Our strategic framework ensures we have specific projects and BAU focuses on these trends and others to retain and strengthen our market leadership, and deliver world-class OEM operations and increasingly competitive value to our customers.”
RME continues on its growth trajectory and on 15 October entered into an agreement to acquire industrial blasting and protective coatings business Masterblasters for an undisclosed sum, as reported.
Founder Executive Chairman and Chief Engineer John Russell says the acquisition is an opportunity to strengthen RME’s position as an original equipment manufacturer (OEM) of mill relining technologies.
It will also secure an important durability feature in RME’s supply chain, and that of the long-term future of another Toowoomba-founded business, Russell says.
Established in 1985, RME employs more than 450 people worldwide and has grown to have operations across more than 440 mine sites and 64 countries, with 13 international sales and service centres.
Austin Engineering (ASX:ANG) is also assessing potential strategic M&A opportunities to improve its geographic capabilities, customer offerings, production capacity and product footprint and continue to leverage its economies of scale.
In August, the company stated there were no opportunities that Austin considered sufficiently advanced to warrant disclosure at this time.
As at the time of writing, Austin is yet to announce any deals to the market.
Its inorganic growth is being backed by a robust balance sheet. FY25 guidance includes a revenue increase of 12% to circa $350 million (FY24: $313.2 million), and an underlying EBIT increase of 30% to circa $50 million (FY24: $38.6 million).
With its strengthening balance sheet, Austin has improved its ability to invest in the business for capacity and efficiency improvement to meet the organic growth seen across the group.
Austin’s bucket segment continues to develop as it previously predicted. Bucket product and services revenues are at multi-year highs for Austin, with a 43% year-on-year increase recorded in Australia, where the initial emphasis has been.
This has driven an overall 13% improvement across the group. The development of the mining bucket segment continues to represent a growth area in the Americas as well.
According to the Hays Mining Industry Report, despite the headwinds facing the industry, Australia is punching above its weight (with some segments of the market). The aforementioned companies and market segments appear to validate these findings.
In tomorrow’s (22 October) edition of the METS Insight: State of Mining Review, Mining.com.au uncovers why the competitive landscape remains robust, with some notable changes compared to 2023.
Part two details Australia’s leading role in developing technology to support mining and outlines which METS companies are driving this by investing in R&D.
Write to Adam Orlando at Mining.com.au
Images: Australasian Metals, Russell Mineral Equipment & Imdex
