Australian Mining Industry's Downward Slide Continues

As we reported early in February of 2015, things haven't been looking so good lately for the Australian mining industry. As commodities plummeted and confidence in the industry wobbled, investors seemed unsure whether or not they wanted to keep throwing good money after bad.

We're sorry to report that as of this writing, there hasn't been any big turnaround. In fact, the situation seems to have worsened.

Australian Mining Industry's Downward Slide Continues:

First, MSN news reports that the mining boom in Western Australia has ground to a halt. This has had unfortunate effects on local residents.

The minerals industry has created billions of dollars for the region but with the price of iron ore plummeting, towns like Port Hedland in the Pilbara are facing unprecedented challenges. Dozens of local businesses have closed in recent months, leaving mining trucks and equipment strewn idly across the town (MSN News).

Second, as the mining boom slows, mergers and acquisitions have slowed as well. Mining Weekly offers exact figures demonstrating the declining number of offers and how these factors will affect the overall market if "innovative financing structures" are not employed.

Third, those within the industry continue to complain that the government is being un-supportive, if not downright difficult. Late in February, the chairman of Shenhua Australia flat-out accused the government of needlessly delaying the project by dragging out water-trigger legislation. Since the process has been underway for more than eight years now, with Shenhua having invested $700m thus far with little to show for their efforts, it's easy to understand their frustration.

No doubt the issues leading to Australia's mining woes are many and complex. It's our desire to see the trend turn around and the industry strengthen in the days and weeks to come. Of course the turn around will be heavily dependent on a resurgence of minerals demand from China, India and other large developing economies.

Remember that we provide mine consulting services in addition to selling mining equipment tires. If you need help managing your mine's tire inventory or need to streamline your tire inventory and ordering system, contact us.

Image credit: Flag of Australia at Wikimedia Commons. Yellow line arrow added in house.

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