More than 52,000 delegates at MINExpo 2012 in Las Vegas have heard the minerals, metals and coal industry will be responsible for leading global economic growth as unprecedented demand kicks off an international supply chain effect.
The exhibition is already the world’s largest mining equipment, products and services convention, but the 2012 event has broken records for attendance from delegates of 36 countries, using 860,000 square feet of exhibition space and procuring equipment and after-market sales of more than US$52 billion. MINExpo is hosted every four years by the USA’s National Mining Association.
The overwhelming mood of optimism underlying this year’s event is being attributed to the massive demand being driven by exponential urbanization and energy consumption in developing nations. This renewed optimism for the commodity market is being shared by global mining industry leaders.
Four of the world’s leading producers of mining equipment, coal and minerals spoke in agreeance at a CEO panel in front of more than 1200 delegates at MINExpo.
Peabody Energy chairman Gregory Boyce said the strong growth in global coal demand is being powered by rapidly expanding Asian economies, where the rapidly growing middle class in China, India and African continents is pushing growth in demand across the sector. “Energy is a basic human right, yet today 3.6 billion people in the world have either little or no access to electricity. Coal will be critically important for providing this vast region of the world with affordable electricity.”
MINExpo 2012 chairman and president of Joy Global Michael Sutherlin said developing countries in Asia were only mid-way in their growth curve as measured by metal intensity per capita, with China at the same parity now with the developed world that Japan was in the 1950s.
Newmont Mining’s chief executive officer Richard O’Brien also dismissed the myth that global competition for natural resources may come at the expense of the environment and safety. “Mining operations anywhere in the world that are the safest and most environmentally sound are also the most productive mines with the most talented workforce. If we don’t get the environment and safety right, we will lose our social license to operate.”
The optimism was also shared by equipment manufacturers Caterpillar and Komatsu who have recently slashed 2015 earnings forecasts after commodity price slumps and shrinking mining budgets. “I know there are lots of headlines out there that mining is dead, not one more ounce of coal will ever be mined, iron ore will never come back, the world is going to stop spinning, it’s over,” Caterpillar’s chief executive Doug Oberhelman told delegates. “Well, it’s not over.”
Caterpillar had more than 25 pieces of large equipment on show, shutting down early-morning Las Vegas traffic by bringing in a $3 million coal-hauling locomotive on a big rig.
Some discussion around the concerning slowdown in China’s economy was perhaps the only topic to take any shine off the expo’s buzz. China’s annual economic growth is now at less than 10% which is impacting on imports of iron ore and other materials needed for infrastructure construction. The government has approved 60 major new projects at a cost of $150 billion in a bid to stem the economy slowdown.
Doug Oberhelman says lots of companies impacted by the slowdown during the last three years will be able to be part of the pending turnaround.