A new report forecasts the global mining equipment rental market will grow at a CAGR of 3.36 per cent between 2016 and 2020.
The Global Mining Equipment Rental Market 2016-2020 report outlines how the high cost of capital, overhead costs, and maintenance costs attached with the ownership of mining equipment have led end-users to rent mining equipment.
However it will be mostly at the smaller end of the mining scale where this growth will be experienced as when it comes to small-scale projects with shorter life spans companies prefer to rent equipment rather than purchase it, whereas “large-scale mining companies tend to focus on current projects rather than take risks and venture into new ones,” the report states.
“This is a shielding strategy they adopt, wherein they go slow on new explorations, cut down expenditure, and run tighter operations to maximise the potential of current projects. Such strategies protect them from the impact of declining commodity prices, expensive operations, and increased energy bills.”
According to the report, renting mining equipment is a cost-effective alternative to owning such equipment, especially for short duration projects.
“Higher financial flexibility, reduced maintenance cost, and low cost of ownership are the key advantages offered by rental mining equipment; therefore, they are highly beneficial for small-scale mining companies and contractors and will see growth in these areas,” the report states.