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Depleting Fuel Prices Affecting Mining Industry

Depleting Fuel Prices Affecting Mining IndustryDepleting Fuel Prices Affecting Mining Industry

Global production growth from mining activities remained low in 2015 and was significantly affected by lower crude oil prices, and the combined production of mining and utilities rose a mere 1% in 2015, according to a report released Thursday by UNIDO said.

Extraction of crude oil accounts for almost 90% of the mining industry in oil-rich economies.

World Statistics on Mining and Utilities is a biennial publication of the United Nations Industrial Development Organization which presents global statistics on mining and quarrying, electricity, gas, steam and air-conditioning, as well as water supply, sewerage, and waste management.

The report states that the growth potential of mineral products is generally diminishing due to the depletion of mineral resources. The decline in recent years was caused by lower demand of minerals from slow growing manufacturing combined with falling oil prices. The report refers to OPEC data which lists the average price of crude oil per barrel at $49.5 in 2015, down from $109.5 in 2012.

Between 2010 and 2015, the annual average growth from mining and utilities in industrialized countries was around 1%.

During the same period, the annual average growth in emerging and developing economies was estimated at 2.8%. Both figures indicate a declining trend compared to the data published in the 2014 edition of the same UNIDO report.

Despite the gradual decline in mining activities in industrialized countries, this sector plays a dominant role in some developing economies of Africa and the Persian Gulf Arab region. In recent years, the contribution of mining to GDP rose significantly in Angola and Equatorial Guinea.

The United States accounts for more than 15% of the total value added of mining and utilities. China ranks second, however its position relative to the population size is much lower. In terms of per capital value added of the mining and utilities, leading economies in 2015 were Qatar, Kuwait, Norway and Brunei Darussalam.

The share of developing and emerging industrial economies in the global production of mining and utility sectors is constantly rising and in 2015 reached 50% of the global total. However, the development of this sector involves a huge infrastructural network of mines, structures, pipelines electricity mains, etc. Many resource-rich developing countries are yet to exploit their mining industry potentials for economic growth.

UNIDO maintains international industrial statistics database covering manufacturing and mining and utilities. Statistics on global manufacturing are presented in International Yearbook of Industrial Statistics.

 

Financialtribune.com