Chinese mining industry driven by the increase in coal demand

The Chinese mining industry has been forecast to increase at a compound annual growth rate (CAGR) of 14.28% over the period 2011-2015.

Key factors contributing to this market growth include the increase in demand from the coal mining industry, along with technological advancements occurring with regards to mining equipment.

The industry experienced rapid change during the past five years. Extensive restructuring led to many mergers, acquisitions and exits. The Chinese government even offered smaller companies incentives to leave the industry in order to regulate output and performance.

The rapid growth in the economy of China is one of the major drivers for growth within the mining market in China. The economic growth in China contributes to the growth of several industries such as automotive, energy and power, aerospace, and infrastructure.

These industries rely on natural resources for their raw materials; thus, they have a dependence on the mining industry. Thus, the growth of these industries results in the growth of the mining industry.

China is the world's largest coal producer and consumer and currently accounts for about half of the global coal consumption.

Total revenue of the coal mining industry in China was estimated at $525.2 billion in 2012, representing annualised growth of 28.1% since 2007. Revenue drivers over this period included rising coal prices and rapidly growing demand for coal for power generation.

To meet the ballooning domestic demand, raw coal output in China increased from 2.29 billion tons in 2007 to an expected 3.79 billion tons in 2012. During the same period, spending on imported coal surged by 52.6% annually, from $3.1 billion to $25.5 billion.

Kep companies currently dominating the Chinese mining industry include China Coal Technology and Engineering Group Corp., China National Coal Mining Equipment Co. Ltd., and Zhengzhou Coal Mining Machinery Group Co. Ltd.

For more information on the Chinese mining industry, see the latest research: Chinese Mining Industry

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