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Southern African Mining Explosives Market
Frost & Sullivan, Nov 2009, Pages: 95
Research into the mining explosives market was conducted for the major Southern African mining countries, namely South Africa, Namibia and Zambia. Country analyses are provided for the mining sectors and an opportunity analysis for the region. The study focuses on packaged and bulk explosives, along with detonating systems. Market sizes are provided for the total market and the aforementioned segments. Key drivers and restraints are also highlighted, along with industry challenges. Revenue forecasts are provided for 2009- 2015.
This Frost & Sullivan research service titled Southern African Mining Explosives Market focuses on the South African, Zambian and Namibian mining explosives markets. An opportunity analysis is provided for Zimbabwe and Botswana. A discussion of challenges, drivers and restraints is accompanied by strategic recommendations. In this research, Frost & Sullivan's expert analysts thoroughly examine the following technologies: bulk mining explosives, packaged explosives and detonating systems. Application sectors covered include underground mining, surface mining and quarrying.
Market Overview
Detonating Systems to Spearhead Growth of South African Mining Explosives Market
Southern Africa is endowed with expansive mineral deposits whose exploitation is set to ensure sustained demand for mining explosives. “Increased investments into the mining sector have fuelled demand for mining explosives,” states the analyst of this research. “It is anticipated that as the global economy rebounds from the economic downturn and commodity prices recover, there will be greater demand for mining explosives.”
Detonating systems offer the greatest scope for innovation in the market. Shock tube detonating systems are currently the main initiating system for mining explosives. Although electronic detonating systems offer greater functional advantages over shock tube systems, adoption of electronic systems is currently slow due to their being more expensive relative to the shock tube systems. Cord detonating systems are in the decline phase. “Shock tube detonating systems are the primary system of choice in the Southern African mining explosives market,” notes the analyst. “At one point, despite the noted functional advantages over traditional cord detonating systems, shock tube systems were more than double the cost of cord systems, hindering their uptake in the market.” The interplay of market forces aligned with improved perceptions by the market of the advantages of shock tube systems has led to their increased usage in the market. Prices of shock tube assemblies are now just under 30 per cent more expensive than capped fuse and igniter cord systems.
Establishment of Forward Contracts and Preferential Supplier Agreements to Sustain Market Momentum
Ammonia is a major input in the manufacture of mining explosives and is also a key raw material that is utilised in other industries, such as fertilisers. Competition for limited amounts of ammonia results in rising prices for manufacturers. The ammonia shortage in 2008 led to South Africa resorting to increased imports, thus resulting in higher costs of production for explosives manufacturers. Ammonia produced in South Africa is also priced on an import parity basis, making it relatively more expensive for manufacturers. “Developments that have an impact on the mining sector affect demand in the mining explosives market,” explains the analyst. “The recent commodity price slump led to a decline in the demand for minerals, which had a corresponding impact on the demand for mining explosives.” Coupled with ammonia shortages in the market, growth in the mining explosives sector was stifled.
Mining explosives manufacturers do not have substantial influence on the mining sector as they are dependent on the industry. Despite this market structuring, there are some parameters these firms can establish to ensure sustained operations and demand for their products. “Establishment of forward contracts by manufacturers of mining explosives to lock-in supply of essential inputs such as ammonia will go a long way to hedge against bottlenecks for producers,” advises the analyst. “Preferential supplier agreements will also enable mining explosives manufacturers to have a guaranteed demand base for mining explosives products.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Underground mining
- Surface mining
- Quarrying
Technologies
The following technologies are covered in this research:
- Bulk explosives
- Packaged explosives
- Detonating systems
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