DUBLIN, February 12, 2016 /PRNewswire/ --
A recent report published on Research and Markets forecasts the global iron ore market to grow at a CAGR of around 3% between 2015 and 2019. It identifies the high capital required for the iron industry as a key challenge for the market and notes that huge investments are necessary to transport iron ore from mine to freight.
Rio Tinto, the world's second biggest mining company, recorded a net loss of $866 million for 2015 and announced on Thursday that it would scrap its policy of maintaining or raising dividends each year. The price of iron ore, which generates two-thirds of Rio's earnings, has fallen 45% during the past year. The report on the iron ore market had predicted that one of the major challenges for companies would be the volatility in iron prices.
A report on the Global Mining Equipment Market has predicted significant growth of 7.28% during the same time period. According to the report, the market shows high growth potential in developing countries such as China, India, South Africa and Brazil. The rapid economic growth in these countries will boost the growth of the mining equipment market. But the report also notes that declining commodity prices worldwide were forcing companies to put their projects on hold, which also reduced demand for mining equipment.
Mining firms are under pressure from credit rating agencies to curb spending. Other large mining companies, including Glencore and Anglo American, have cancelled annual dividends. BHP Billiton, Rio's main rival, is expected to make a similar announcement when it releases its results later this month, according to reports.
The Global Coal Mining Industry is expected to grow steadily at a rate of 2%, in terms of consumption. The coal market is benefiting from the increase in global energy demand.
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1. Source: Fortune [http://fortune.com/2016/02/11/rio-tinto-dividend-profit ]
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