According to a recent study, the mining equipment market is set to boom in the next few years, which is also an indicator that the mining industry will keep on its upward trend as a bull market.
This is set to have a beneficial impact on emerging markets that are invested in mining, including African countries such as South Africa and Congo.
Mining Market Rise Affects Several Sectors in the Trading Industry
The benefits that a rising mining market could have on emerging markets are many-fold.
As the industry draws more heavy players, investments within national borders could prove a great asset to a country’s GDP.
This could impact the foreign exchange market, with forex exchange rates such as the USD/ZAR rate going up in favour of South Africa’s local currency.
Furthermore, when big companies undertake new and ambitious projects in an emerging market, this could lead to an upward rise, offering an opportunity for bulls to speculate, from the traditional share value price fluctuation to the derivatives market.
But perhaps most importantly, it also means that the commodity market will be affected, with metals and minerals being positively influenced.
African Countries Streamline Mining Investments
After all, the mining sector is consistently rising across Sub-Saharan Africa. In the past year, the Democratic Republic of Congo introduced some changes to the country’s mining code, which will impose further royalties on minerals.
However, according to BMI, this will not impede the growth of the mining industry in the country.
To the contrary, both Congo and other African countries are projected to benefit from mergers and acquisitions in the mining sector, following the example of Glencore.
The company increased its holdings in copper-cobalt mines by buying out the Mutanda mine for $922 million and the Katanga mine for $38 million, both of which are situated in Congo.
In South Africa, the recent change in leadership is good news for the investment landscape, with negotiations on the country’s mining charter streamlined after Gwede Mantashe was appointed Minister of Mineral Resources a year ago.
Mali has also announced that it will revisit its regulatory framework. Meanwhile, African industry leaders such as Randgold, AngloGold, and Impala Platinum are expected to see their profit margins grow, to the advantage of their host countries.
Mining Equipment Market Set to Rise
Against this landscape, the latest news that the mining equipment industry will move upwards is just another indicator of the projected rise of the mining industry.
According to a recent study by Zion Market Research, the value of the global mining equipment market is set to rise to roughly $98.5 billion by 2024.
This means that the market, which generated revenue of around $70 billion in 2017 alone, will grow at a compound annual growth rate (CAGR) of 5% from 2018 to 2024.
This boost is aided by the fact that mining equipment is undergoing a revolution to fully integrate digital mining solutions, including drones and internet of things (IoT) devices.
Metal mining is expected to keep leading the market, with more demand for base metals such as gold, platinum, and copper. Coal mining still had a significant impact in the industry in 2017, as coal is widely used in generating electricity.
Beyond that five-year estimation period, it could be interesting to see how the transition to digital mining could further affect these markets.