Oceania and North America lead global establishment capex potential

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 a total global initial establishment capex of $1,185.7bn across 2,472 projects either currently in development or predicted to commence development in the next 9 years.

According to GlobalData’s Mining Intelligence Center, projects currently under construction represent a total capex spending of $197bn, or 17% of this total, with the remainder made up by those currently in feasibility and prefeasibility stages. In terms of investment value, Oceania accounts for the largest share of 22.8% followed by North America (22.3%), South and Central America (16.9%), Middle East & Africa (14.3%), Asia Pacific (13.8%) and others (9.9%). However, in terms of project count, Asia Pacific accounted for the largest share at 20%, followed by North America and Oceania (19%) each, Middle East and Africa (17%), South and Central America (14%) and Former Soviet Union & Europe remaining (11%).

Commodities with the greatest spending planned or in progress are coal (19.4%), iron ore (17.2%), gold (5.9%) and potash (3.8%), where there are collectively 183 projects under construction, 663 at the feasibility stage and 246 at the prefeasibility stage.

The largest projects include BHP’s $22bn Olympic Dam Expansion project, Adani’s $16.5bn Carmichael Coal Mine in Queensland, Australia, and Sprott Resource Holdings/ WISCO International’s $14.1bn Lac Otelnuk iron ore project in Canada.

Regional potential initial establishment capex, 2018-2025

Source: GlobalData, Mining Intelligence Center                                                                                                                    © GlobalData