For an outlook on 2021, full flowsheet solutions provider FLSmidth recently asked its Regional Heads to look at their geographical area and the trends within the mining industry that they see growing over the next 12 months.
“With light at the end of the tunnel, in terms of a COVID-19 vaccine and clarity around the US presidential election, we eliminate the uncertainty holding back investments and the industry can begin to plan ahead,” says Pat Turner, Regional President for North America.
Turner sees a new page being turned and with it a new sense of stability and predictability, which is likely to bring an increase in investment. “Most of our customers in mining are doing from ok to very well. And while orders were a little slow in 2020 due to the turmoil brought by COVID-19 and unpredictability surrounding the US elections, we are entering a period of falling uncertainty. As doubts fall away, we are likely to see more confident customers and an increase in orders.”
One of the regions that escaped many of the ill-effects of COVID-19 was Australia, where a sound governmental response limited the spread of the virus. Tamer Eid, Regional President of FLSmidth in Australia explains: “Mining within Australia and the region has been extremely resilient on the back of diligent controls by the Australian government and mine operators to prevent the spread of COVID-19 and keep operations running. This means that in 2021, across a range of commodities, we see the opportunity for growth with demand, primarily from China, driving pricing and production growth.”
Eid sees certain sectors with great potential: “Iron ore is approaching all-time highs, while gold has benefited from the high level of global uncertainty and the weaker Australian dollar. Base metals are also showing improvement across many ore types.”
Similar to other markets, digital was given a boost by the lockdowns of 2020 and that trend is likely to continue, reckons Eid: “COVID-19 has, as for many sectors, helped push the conversation with our customers around digital further. Both through necessity of support and through the advantages it can provide in terms of process and machine improvements. This trend will only gain momentum in 2021 and beyond. It is not the only hot trend in town, however: The need for productivity and sustainability improvements will also continue to grow throughout 2021 as customers seek to get more out of their existing assets and ESG becomes even more critical for their license to operate.”
Deon de Kock, President, Sub-Saharan Africa & Middle East Region at FLSmidth has noted small changes in customer focus, which are likely to continue into 2021: “There has been no dramatic change in terms of the industry focus in the recent period, but it is noticeable that the longer-term strategy for new projects by larger miners is changing. There is an increased focus on power reduction and the sustainability agenda is increasingly visible, especially in the dryer areas of the region. For instance, the Middle East has a growing focus on water usage, driven by the increasing cost of water. Overall, the mining sector in the region remained resilient during the last quarter of 2020, with the majority of the mines operational in the region during this period. In 2021, we expect an untick in capital business and a steady improvement in aftermarket.”
Aftermarket and service built on customer intimacy and knowledge is high on the growth agenda, according to Claudio García Bernal, the Regional President in South America. “There’s a positive outlook for the mining market here – copper is at a high price level and the fast recovery in China has increased the metal demand, which has a direct impact in the operation increasing levels of production. This could bring the eventual expansion or optimisation projects – this will be interesting for us when it comes to flowsheet capabilities, upgrades and retrofits. Increasing production levels would also raise the demand of maintenance and aftermarket services.”
“Within aftermarket and service, there is a growing focus on providing full service and having a complete package of knowhow, expertise, experience, and sustainable technologies. When it comes to optimisation, reliability and assets lifecycle support, we are well placed and ready to respond to customer needs. The other key conversation in the South American market is around sustainability. Given the world demand trends for minerals required for low-carbon energy and products, such as EVs, mines have to look at lowering resource use and becoming more energy efficient.”
Per Mejnert Kristensen, the Asian Regional President, is also optimistic about the months ahead: “Mining has been left comparatively unscathed by COVID-19 if we look across industries. At the moment, most commodity prices are high, which is creating optimism among the mine operators. While several of the large mines in Asia were impacted by COVID-19 for a period in April/May, they have basically been running uninterrupted since then although they have had to deal with some sporadic outbreaks of COVID-19. But the outlook is bright and my current expectation is that the large mines in Asia will continue to run normally in 2021 and we can expect some growth as confidence returns post- COVID-19.”
Looking at the bigger picture, Kristensen continued: “The Chinese economy is nearly back to normal, with a strong support from the central government, but most other countries in the region continue to be severely impacted by COVID-19 from either a health or economic perspective. As the vaccine has its effect, we expected that all countries in Asia will revert to growth in 2021 – however, for many countries it will only mean getting back to 2019 GDP levels after the contraction in 2020. Again, with China being the positive exception.”
Growth is also expected by Mette Dobel, Regional President Europe, North Africa and Russia (ENAR). “Almost all mines in our region have remained in operation and we see substantial investments into the mining industry especially in Russia and CIS countries,” she notes. “We expect to see investment in copper and gold plants increase, and a growth in fertiliser minerals. Throughout our region, miners are highly focused on improving production rates and plant uptime – these and production efficiency are key drivers for our growing aftermarket business. With a few COVID-19 clouds still hovering over the region, such as continued restrictions for site access and general travel restrictions across borders, we see that our regionalised service setup has made a huge difference. Customers can access local experts and this, together with remote digital support, has kept us very busy and will continue to do so. As a consequence of the pandemic demand for local service and digital supervision in the mining industry will accelerate.”