Australian Reduction Planning - February 2016

Australia's Reduction Planning February 2016 Australians have little choice but to grin and bear the downturn in the metals market after riding the highs of the early 2010s bubble. Falling prices have made plenty of Australian iron miners face particularly tough choices about their future, including their operations and staff. A Timetric Mining survey has revealed that Australia's fifty‐billion‐dollar iron mining industry faces the bleak prospect of tightening their belt, especially for their underground mining projects.

Of the 100 Australian mining managers surveyed by Timetric, 35% expected that they would have to decrease spending for underground mining projects in 2016, while just 20% noted that they expected their spending to rise.

The picture for above‐ground mining isn't quite so bleak, where just ten percent of respondents believed they would decrease their yearly spending and nearly seventy percent said there would be no changes. The challenges faced by iron miners aren't so bad as some neighboring miners; some 40% of coal firms expect to decrease their 12‐month budget plans. Given that most of the surveyed iron miners come from larger companies operating in Australia, such as Fortescue Metals, the downturn in spending might not reflect iron performance specifically but rather represent the company's overall cash flow and stability. A few companies, undaunted, have announced expansion plans; Rio Tinto, for instance, plans to expand the Pilbarra mine to harvest 360 million tons per year, a 20% increase over current production.