Strong economic growth in large emerging nations, such as China and India, has fuelled growing demand for iron ore
Melbourne, Australia (PRWEB) August 09, 2012
The Iron Ore Mining industry is expected to generate revenue of $64.6 billion in 2012-13, compared with $25.4 billion in 2007-08. Over the period, strong economic growth in large emerging nations, such as China and India, has fuelled growing demand for iron ore. This has led to increased production and higher prices (despite recent weakness), which are expected to underpin annualised revenue growth of 20.5% over the five years through 2012-13. According to IBISWorld industry analyst Tim Stephen, “industry revenue is forecast to expand by 9.5% in 2012-13 as a large increase in production more than offsets price weakness”. Increases in iron ore output worldwide are putting downward pressure on prices.
Stephen adds, “Australia's iron ore production is forecast to total 520 million tonnes in 2012-13, compared with 324.7 million tonnes five years earlier”. About 504.8 million tonnes of iron ore will be exported, and nearly all sales will go to China, Japan, South Korea and Taiwan. Australia will import some iron ore, mainly from India. The industry is expected to continue growing strongly over the five years through 2017-18, as production volumes increase and prices recover. A volatile price climate is expected over the coming five years. Demand will continue to grow steadily, but supply will come onstream in large blocks, leading to seesawing prices around an upward trend.
The Iron Ore Mining industry is highly concentrated. The major players in the industry are Rio Tinto Plc - Rio Tinto Limited, BHP Billiton Limited and Fortescue Metals Group Limited. Iron ore producers (together with black coal miners) became subject to the Mineral Resource Rent Tax on 1 July 2012. A headline tax rate of 30% will be imposed on profit after a return equal to the long-term government bond rate plus 7.0%. Firms will also gain a tax credit for royalties paid to state governments. Carbon pricing, initially in the form of a carbon tax, was introduced on the same date. Mining firms' fuel use attracts the tax, which is implemented via reductions in fuel tax credits.
For more information, visit IBISWorld’s Iron Ore Mining report in Australia industry page.
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IBISWorld industry Report Key Topics
Firms in this industry mine iron ore. The main type of ore mined is haematite.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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