Mining Equipment Services Market Size to Grow at a CAGR of 3.4% During the Forecast Period 2021-2026
Mining Equipment Services Market is analysed to grow at a CAGR of 3.4% during the forecast period 2021-2026 to reach $160.9 billion by 2026. Mining equipment services market is developing rapidly due to rise in the mining exploration activities and the growing demand of raw materials due to the rising mining projects. Moreover, rapid industrialization and globalization for improving a well-functioning economy is further driving the mining equipment market. Furthermore, the deployment of innovative services and parts such as part replacement services, maintenance services, fleet services and so on further rise the market’s growth. The third-party service providers also offer predictive maintenance contracts that enables loss of production, reducing in downtime, also leading to reduce the cost in the research and development of equipment maintenance services and inventors. These key drivers further propel the shift of companies towards third party vendors, and further boosting the growth of the mining equipment services market.
Mining Equipment Services Market Segment Analysis- By Equipment
Surface mining equipment held the major share 36.2% of mining equipment services market in 2020. In Surface mining, the equipment deployed are drilling equipment, electric shovels, high wall miners, excavators, dumpers, motor graders, wheel dozers, and others. As stated by Environmental Impact Assessment (EIA), in 2019, about 756 million short tons of coal is produced in U.S. The surface mines accounted for 63% of total coal production, also the surface mines accounted for 63% of total number of mines in US. Wyoming region consists six of top ten U.S. coal-producing mines and all these mines are surface mines. Moreover, the surface mines in the west coal region produce 92% of total coal. Therefore, the significant presence of surface mines in major countries such as U.S., China, India and so on are set to boost the demand for the deployment of mining equipment services thereby impacting on the growth of the market during the forecast period 2021-2026.
Mining Equipment Services Market Segment Analysis- By Application
Metal mining is the fastest growing segment in Mining Equipment Services System market and estimated to grow at a CAGR of 4.3% during forecast period 2021-2026 owing to increase in demand for services such as metallurgy and process design, analytical services and so on. In addition, growth of residential and non-residential construction sectors in Southeast Asia and other developing countries is projected to drive the demand for aluminium and copper products and is set to drive the market. Moreover, U.S. metal mine production in 2019 was estimated to be $28.1 billion with almost $500 million higher than in 2018 and anticipated to row in the forecast period. The principal contributors to the total value of metal mine production in 2019 were gold (32%), copper (28%), iron ore (19%) and zinc (7%). According to World Steel Association, India’s steel mining, is estimated 97.5 million tonnes in 2019. With increase in demand for metals in various countries, it is expected to propel the market growth during forecast period.
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Mining Equipment Services Market Segment Analysis- By Geography
Asia-Pacific had accounted for the largest share of $41.1% in 2020, analysed to grow with a CAGR of 2.3% for the Mining Equipment Services market during the forecast period 2021-2026, followed by Americas and Europe. China is the largest consumer of the lithium majorly attributed to the presence of the electronic manufacturing as well as electric vehicles manufacturing industries. The country is also third largest producer of Lithium. Therefore, the significant mining activities in the country is set escalate the mining equipment services market during the forecast period 2021-2026.
Mining Equipment Services Market Drivers
Growing Outsourcing Equipment
The organizations are turning towards the use of outsourcing equipment in order to reduce expenses and to maintain productivity. The companies are widely taking decisions to adopt outsource equipment for increasing efficiency. Also, the downturn in the economy has enforced the companies to use outsourcing for decreasing expenses and further meeting the production targets. Furthermore, with the rising use of outsourcing equipment and maintenance services, the companies can fulfil the customer’s requirement. The outsourcing of equipment also results in removing outside vendors, a leading to reducing issues while managing the in-house maintenance team. Thus, the growing of outsourcing equipment for businesses to cut-down cost and increase production levels will surge the demand for the mining equipment services market.
Rising shift to third party service vendors driven by lower costs
The need for effective machinery maintenance and heavy repair equipment services from third party vendors will highly fuel the growth of the mining equipment services market. As equipment repair and maintenance services are highly cost-effective, which led to the companies to shift towards third party for offering low cost services are reliable and leads to productivity by extending the lifetime of the equipment. Furthermore, the adoption of maintenance services such as predictive and preventive maintenance services will lead to maximize the systems uptime, optimization of the asset management and warranty of the equipment life which will further enhance the market’s growth.
Mining Equipment Services Market Challenges
Environmental effect on the mining industry
One of the major challenges which hampers the growth of the mining industry is the effect on the environment. As mining comprises of erosion of the environment, formation of sinkholes, loss of biodiversity, and factors such as contamination of soil, groundwater, and surface water by chemicals from mining processes. Moreover, the mining industry also leads to the host to coal dust, noise and UV exposure which has adverse effects on miners such as musculoskeletal disorders and thermal stress. These key factors hinder the mining industry which further effects the growth of the mining equipment services market. Also, the depletion of earth resources due to extensive mining activities has led to pose a fragile impact on the environment leading to greenhouse emissions and other harmful gases in the environment which has formed a social concern. All this has led to slowdown of mining activities, particularly in Europe.
Mining Equipment Services Market Landscape
Product launches, acquisitions, and R&D activities are key strategies adopted by players in the Mining Equipment Services market. The key players in the Mining Equipment Services market include Komatsu, Caterpillar, Hitachi, Liebherr, Sandvik and among others.
Acquisitions/Technology Launches/Partnerships
In January 2021, Caterpillar had launched next generation three new large excavators along with two ultra-high definition demolition (UHD) machines. This kind of development activities drive the demand for the market.
In June 2019, Komatsu had acquired mining workforce optimization company in order to improve safety and productivity of mining customers. This kind of acquisition increase the market share of the companies.
Key Takeaways
Adoption of advanced equipment is set to drive the mining equipment services market.
Surface mining sector is poised to provide opportunities to the Mining Equipment Services market during the forecast period 2021-2026 owing to increase in investments in surface mining.
Presence of high number of players and high adoption of mining services in countries such as China, India and Japan boost the Asia-Pacific mining equipment services market.
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