After commodity price declines, increasing production costs and declining ore grades negatively impacted investment in the mining sector, a turnaround is starting to be seen with global establishment capex of $253bn across 483 projects either currently in construction or predicted to commence construction by 2020.
According to GlobalData’s Mining Intelligence Center, projects currently in construction represent a total capex of $162bn, or 70% of this total, with the remainder to be made up by those currently in feasibility. Projects in Asia-Pacific account for the largest share of the total project count at 38%, followed by the Middle East and Africa (15%), Former Soviet Union (14%) and North America (10%). In terms of investment value, spend in Asia Pacific is proportionately lower at 23% of the total, followed by the Middle East and Africa (20%), Oceania (18%) and North America (15%).
Commodities with the greatest spending planned or in progress are coal (24%), gold (19%), copper (18%) and iron ore (9%), which collectively have 240 projects under construction and 80 at the feasibility stage.
The largest projects include Adani’s $16.5bn Carmichael Coal Mine in Queensland, Australia; Novagold Resources/Barrick Gold’s $6.6bn Donlin Gold Project in Alaska, and First Quantum Minerals’ $6.3bn Cobre Panama Project.
Overall the top ten mining companies: Adani, Saudi Arabian Mining, Sibanye Gold, Vale, Barrick Gold Corporation, First Quantum Minerals, China Shenhua Energy, Freeport-McMoRan, Newmont Mining Corporation, Seabridge Gold, and BHP Billiton account for 30% of the total capex.
Global initial establishment capex trends (2018-2020)
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|Source: GlobalData ©GlobalData|
Where an initial establishment capex figure has not been released for a particular project, GlobalData’s forecasts for capex based on key factors such as production capacity, mine type, strip ratio and processing technology.