According to a report by the Timetric’s Mining Intelligence Center (MIC) one-third of Australian underground mines plan to cut spending this year.
A survey by MIC reveals 35 percent of underground mines are expecting to decrease spending across their operations during 2016, while the majority (65 percent) of surface mines expect investment to stay the same.
At the end of last year, Timetric surveyed 100 mine managers and other senior decision-makers in operating mines in Australia, asking respondents to outline their predictions for changes in spending over the following 12 months.
Changes in expenditure vary according to the commodities produced. While all iron ore respondents are predicting expenditure to either stay the same or increase, those from the coal sector were most likely to predict a reduction in spend (38 percent), ahead of precious metals (25 percent).
Only eight percent of surface operations are planning to cut their spending while 35 percent of underground mines are expecting no changes in expenditure over the next year. In contrast, 31 percent of surface operations expect to increase their investment this year, with the majority expecting it to be stable.
“This is interesting given the iron ore industry is currently experiencing a major downturn,” says Nez Guevara, the senior mining analyst at Timetric’s MIC.
“However, the iron ore respondents all tended to be from large companies such as Rio Tinto, Fortescue Metals, BHP and Roy Hill, which are all currently in the process of expanding their operations, as opposed to smaller producers such as BC Iron and Atlas Iron, who are currently struggling.”