2021 Mining Equipment, Technology & Services Outlook
Austmine, the leading industry association for the Australian Mining Equipment, Technology & Services (METS) sector, explores the key themes set to impact the industry in 2021.
Gradual Recovery from COVID-19
As we progress forward into 2021, METS businesses will begin to shift from managing and mitigating COVID-19 to planning for life beyond it. METS businesses should be optimistic about growth prospects but must be mindful that the global recovery from COVID-19 will be gradual.
Despite weathering the storm quite well in Australia, our METS sector has still been greatly impacted by COVID-19. According to the Austmine 2020 National METS Survey of 619 businesses, 56% experienced a decrease in revenue due to COVID-19, with the average drop being 33%.
Whilst Government support mechanisms helped to cushion the blow, several factors still significantly impacted business development opportunities for METS including projects being put on hold, delayed investment decisions and domestic and international border closures.
Whilst we can expect vaccinations to roll out throughout the year, the virus will continue to cause interruptions to business as usual. As such, we encourage METS companies to continue in their current agile approach in order to adapt to the rapidly changing conditions.
Great Uncertainty, but Significant Opportunity
Despite this uncertainty, the case for cautious optimism is strong.
Metals prices have remained buoyant throughout the global pandemic and Australia’s mining businesses have gained significant advantages over competing nations where operations were drastically disrupted.
Capital will continue to focus on driving operational efficiency and performance, and Australian METS are well positioned to capitalise on these opportunities with our world-leading mining expertise and value-adding technology.
Furthermore, the project pipeline in Australia is still looking positive and remains far more favorable than many other nations. According to the office of the Chief Economist, there are currently 335 major projects in the development pipeline to a value of A$334-billion. Along with this, a renewed emphasis on developing Australia’s critical minerals industry will allow METS businesses to access new supply chains and set the course for a sustainable future.
Businesses can look to these growth opportunities but should remain vigilant in order to not only guard against COVID-19 risks, but also mitigate potential risks from trade tensions, global instability and other disruptors.
A Return to the International Arena
International travel may well be on the cards in 2021, an important tonic for the Australian METS sector.
The METS sector is one of the most internationalised in Australia, with businesses providing critical products and services to the mining industry in every corner of the globe. Austmine’s 2020 National METS Survey revealed that 65% of respondents export, with a high exposure in significantly impacted markets such as the USA, Indonesia, Chile, South Africa and Brazil.
With our strong track record in mitigating the risks surrounding COVID-19, Australia is uniquely positioned to be one of the first nations with whom global trading partners engage. This will position our solutions at the head of the field and allow Australian METS leaders to be face-to-face with key customers sooner rather than later.
A return to the international arena could also see the resumption of major trade shows and global events at the backend of 2021, providing important opportunities to promote Australian METS innovation to the world.
Government support for METS
Austmine has aimed to put the METS sector at the forefront of Government conversations for many years and it is fantastic to see growing recognition of METS as a key industry for our nation.
Federal and State Governments have signaled a considerable intent to support Australian businesses in the COVID-19 recovery, particularly those in strategic industries such as mining and METS.
In October 20201, the Federal Government launched the $1.5billion Modern Manufacturing Strategy, which committed investments into large transformative projects, supply chain resilience and investments in manufacturing technologies and processes. Resources Technology & Critical Minerals Processing were selected as National Manufacturing Priorities under this strategy, and we expect to see continued support provided to the METS sector in the coming months.
Along with the Modern Manufacturing grants, a vast range of support services and funding is available to METS organisations to utilise in their COVID recovery and business leaders must look to utilise these avenues. Other key funds and support services include the Entrepreneurs’ Programme, Export Assistance grants, the EMDG, the Research and Development Tax Incentive and the METS Ignited Collaborative Project Funds.
Pace of Digital Transformation
One positive outcome from COVID-19 has been the rapid increase in digital transformation for mining with systems being put in place to allow for remote working, monitoring personnel health and safety and driving efficiencies with fewer people.
Mining companies are now more open than ever to explore digital solutions. Australia is home to a broad ecosystem of leading mining technology and software businesses that will benefit from this trend and have the offerings ready to drive the industry forward.
The engagement between buyers and suppliers has also shifted, with traditional procurement practices increasingly transitioning to open innovation approaches that scan the market for new technologies and open the door for increased collaboration. Austmine is working with BHP on this approach in Australia through the Supplier Innovation Program which has already seen the commencement of a successful pilot project. We are also working in the international arena with Tata Steel (India) on their Innoventure initiative and Expande with their Open Innovation Program for Mining. No doubt this reimagination of traditional relationships in mining will lead to increased digital change.
We look forward to discussing this trend further at the Austmine 2021 ‘Harnessing Intelligence’ Conference & Exhibition in Perth from 25th to 27th May 2021.