Fitch Solutions May 2021 Asia Pacific Mining Insight Report predicts that the mining industry in Asia will experience a broad recovery in 2021 fueled by increased mineral production. Two countries positioned to be the beneficiaries of the trend are Indonesia and India. Australia also will experience a growth in mineral production as the world recovers from the COVID-19 pandemic.
A further benefit to the Australian mining sector is its leadership position in adopting advanced mining technologies. In the latter of 2021, Australian companies expect to benefit from improved efficiency and reduced costs due to the implementation of cutting-edge equipment. Autonomous trucks and drills are two of the significant advancements that will lead to increased profitability. In other regions of the world, self-driving trucks have slashed transportation costs by nearly 20%. Australia is also leading the way in using renewable energy as a fuel source for mining operations.
The global battle against climate change creates other opportunities, including lithium mining, a critical raw material in battery production used in electric vehicles. In 2020, Asia was the source of 65% of the world’s lithium mining, with Australia as the global leader in extracting the light metal. The country expects to maintain its global leadership status as new projects continue to come online.
The regional mining industry also faces headwinds in a few vital areas. Regulatory challenges include worldwide efforts to reduce carbon footprints to combat climate change. The coal mining industry will experience the most significant impact from these initiatives.
Despite its strong position in lithium mining, Australia has higher production costs than other areas of the world. Competition from lower-cost producers in South America and price sensitivity can negatively impact production.
India recently discovered substantial lithium reserves and is currently conducting exploratory work. Production capabilities will not be in operation for several years.
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Contact us today to discuss any application questions with our Asia Pacific mining experts.
The information in this article was sourced from Fitch Solutions Asia Pacific Mining Insight May 2021.