North American Metals & Minerals Industry Plans $104 Billion in Construction Starts for 2013

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Researched by Industrial Info Resources (Sugar Land, Texas)--Mining companies continue to slash capital spending for 2013, especially in the U.S. coal sector, which has lost significant market share among power generators. Low natural gas prices and a warmer-than-normal winter season have combined to reduce U.S. coal consumption in 2012.

As a result, many mining companies have announced significant production and capital expenditure scalebacks for 2013.

Peabody Energy Corporation (NYSE:BTU) (St. Louis, Missouri) expects to cut capital expenditures in half for 2013. In 2012, Peabody Energy spent in excess of $1 billion. This coming on the heels of announcements by BHP Billiton (NYSE:BHP) and Rio Tinto plc (NYSE:RIO) to reduce capital expenditures.

Reductions in planned capital expenditures have surfaced after two years of strong construction activity in the Metals & Minerals Industry. Following a recovery that started in the 2010, 2011 was a record-breaking year for construction starts, which doubled that of the previous year. 2012 started out strong, but will end up about 20% less in the value of construction starts than what occurred in 2011. Mining accounts for about 50% of the project spending in the Metals & Minerals Industry worldwide.

In spite of recent company announcements of reductions in capital expenditures, the industry has lined up more projects by value for 2013 than in 2012. According to Industrial Info's North America Industrial Project Database, the North American Metals & Minerals Industry has lined up more than $104 billion in scheduled project construction starts in 2013. This includes more than 152 projects in Canada totaling $64 billion, and 446 projects in the U.S. totaling $29 billion. Mexico has 79 projects totaling $9 billion.

At the beginning of 2012, there were about $80 billion in planned Metals & Minerals Industry construction starts for the year. That represents an increase of about 23% in the amount of scheduled construction starts in 2013 when compared with 2012. The increase in the value of planned construction starts for 2013 can be attributed to increased large mining projects, predominately in Canada. However, Industrial Info is expecting a high level of project fallout especially if demand for coal and other metals like iron ore continues to decline.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.