Explosives are used in varying operations such as the removal of overburden in surface mining, accessing of mineral ore underground and splitting of rocks in quarrying.
New analysis from Frost & Sullivan (chemicals.frost.com), Southern African Mining Explosives Market, finds that the market earned revenues of $689.4 million in 2008 and is forecast to grow to $1185.8 million by 2015. The following technologies are covered in this analysis: bulk mining explosives, packaged explosives and detonating systems.
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"Increased investments into the mining sector have fuelled demand for mining explosives," states Frost & Sullivan Research Analyst Tatenda Zingoni. Frost & Sullivan anticipates that as the global economy rebounds from the economic downturn and commodity prices recover, there will be greater demand for mining explosives."
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.
"Shock tube detonating systems are the primary system of choice in the Southern African mining explosives market," notes Zingoni. "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 in the market of the advantages of shock tube systems has led to their increased usage. Prices of shock tube assemblies are also now just under 30 per cent higher than capped fuse and igniter cord systems.
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. Mining explosives manufacturers do not have substantial influence on the mining sector as they are dependent on the industry.
In the face of the aforementioned conditions in the market, manufacturers can adopt a few key strategies in order to ensure sustainable operations and demand for their products.
"Establishment of forward contracts to lock-in supply of essential inputs such as ammonia will go a long way to hedge against bottlenecks for producers," advises Zingoni. "Preferential supplier agreements will also enable mining explosives manufacturers to have a guaranteed demand base for mining explosives products."
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Southern African Mining Explosives Market / M4B6