Chile Mining Equipment Rental Market Research Report: Forecast (2022-27)

Market Definition

Mining equipment indicates a powered or self-powered machine or vehicle used to extract metals or minerals from beneath the earth's surface and then transport them from the working places to an on-site warehouse facility, processing plant, etc. Sometimes, the miners or the mining companies require equipment for a shorter period, or they do not wish to incur the CAPEX in procuring & maintenance. Therefore, renting out or hiring the equipment is one of the most convenient options. The mining companies pay hourly or monthly charges only for the equipment they use. This way, the companies reduce their fixed & variable costs associated with the equipment.  

Market Insights

The Chile Mining Equipment Rental Market is anticipated to grow at a CAGR of around 3.8% during the forecast period, 2022-27. The Chile Mining Equipment Rental market has gained prominence in recent years, owing to favorable government policies to promote mining activities, booming metal, mineral, and coal exports, as well as a growing interest from global mining companies to explore Chile's mines. Chile has been one of the leading producers of copper, lithium, iodine, rhenium, sodium, and potassium nitrate, among various others. Additionally, numerous countries, including China, the US, Brazil, Argentina, South Korea, Japan, etc., are some of the major buyers of Chile mined products. Furthermore, rising mining exploration activities in the country have increased the demand for mining equipment such as excavators, loaders, cranes, dump trucks, draglines, etc.

As a result, mining companies operating in the country are more inclined to reduce their overall operational costs by renting the equipment rather than investing a large sum of money in purchasing new equipment. According to the Observatory of Economic Complexity (OEC), in 2019, Chile exported copper ore worth USD18.4 billion globally. Moreover, most of the Chilean mines are operated by private players such as Freeport McMoran Copper & Gold Inc., Albemarle Corporation, and companies from Canada, Australia, Europe, and Asia, providing Chile with a constant flow of investments in mining.

Besides, in 2020, the country saw an upswing in mining activities due to the shortage of metals & other essential minerals in the neighboring countries. Consequently, the demand for mining equipment, including machinery & other equipment for surface & underground mining, also witnessed a notable upsurge and would continue to outpour during the forecast years as well.

Key Trend in the Market

Growing Use of Telematics in the Mining Industry

Rising technological advancements & innovation are fueling the mining industry’s growth. Automation, the Internet of Things (IoT), plasma technology, and 3D imaging are the major technologies that have a positive impact on the mining equipment industry. The utilization of telematics in the mining industry helps in the collection & integration of data in a single view to optimize mine performance. Moreover, telematics helps in tracking fuel usage, thus optimizing cost. Furthermore, telematics-enabled equipment could also track & measure operator behavior like harsh braking & speeding at the mine site.

Impact of COVID-19 on Chile Mining Equipment Rental Market

COVID-19 had a significant impact on the Chile Mining Equipment Rental market. In 2020, Chile was heavily dependent upon imports of mining equipment, primarily from North America, Europe, and China. The slowdown in the production of mining equipment delayed the order deliveries to the mining equipment rental companies. In addition, the mining activities were stalled in Chile for around 3-4 months. This further reduced the earnings of mining equipment rental companies, and the hourly rental rate of equipment also registered a decline. However, the resumption of mining activities in late 2020 & the opening up of new mining sites in early 2021 nullified the impact of COVID-19 on industrial earnings.  

Market Segmentation

Based on the Type of Equipment:

• Earthmoving Equipment
• Material Handling Equipment
• Surface Mining Equipment
• Underground Mining Equipment
• Other Equipment

Among them, the Earthmoving Equipment acquired a considerable share in the Chile Mining Equipment Rental market during the historical period. The various range of equipment, including excavators, loaders, bulldozers, etc., are some of the foremost & most extensively used equipment throughout the process of mining, especially for excavating & digging the mines, breaking rocks, removal of several layers of soil, transporting the excavated soil & large rocks through loaders, etc. Consequently, the demand for earthmoving equipment has accelerated for renting purposes. Therefore, the global mining equipment players have expanded their fleet size by acquiring new equipment in Chile.

Hence, the rising thrust of mining, coupled with the active participation of rental companies to offer their services at a competitive price, would flourish the demand for rental mining equipment in the country during the forecast years.   

Based on Application:

• Coal Mining
• Metal Mining
• Mineral Mining

Of them all, the Metal Mining Application held a dominating share during the historical period. The country is blessed with some of the largest reserves of metals in the world. Therefore, the extensive production of metals, including copper, gold, lithium, etc., would generate great demand for rental mining equipment. The country has got 22% of the world’s copper reserves, 11% of molybdenum reserves, 5% of silver reserves, 7% of gold, and 48% of the world’s lithium reserves. Lithium is one of the key components of batteries, and therefore the government's open policies of mine exploration have boosted the mining sector's growth, creating a demand for mining equipment rental in the country. For instance:

• As of 2021, Chile presented its National Mining Plan, which aims to double its copper output by 2050, which would require it to produce a staggering 7 million tons of copper annually by 2030 & 9 million tons by 2050. Under this, the government has nearly 49 projects underway to meet its long-term goal.

Moreover, Chile is exporting technology mining services to 39 markets majorly to the USA, Peru, and Mexico. Thus, metal mining has been a hotbed for copper exploration activities, which would continue to remain a leading factor for mining equipment rental growth during the forecast period.

Based on Region:

• North
• Central
• South

Among them, the North region acquired a significant share in the Chile Mining Equipment Rental market during historical years. As a result of the presence of major copper mine divisions such as the Tarapacá Region, Antofagasta Region, and Atacama Region, the growth of mining equipment supports the region's demand for mining rental equipment. In addition, in the Antofagasta Region, the mining industry represents 70% of the economic activity & the main copper mining deposits are Chuquicamata & Escondida.

Similarly, in Atacama Region, mining represents more than 83% of the regional imports & mines located in the region, such as Candelaria Mine, El Salvador, and Paipote Smelter. Due to the presence of major mining sites in the northern region, the rental equipment market would experience a considerable boost during the forecasted period on account of the increasing number of qualified human resources to operate the machinery, development of local capacities, and strong dependency on mining sites.

Recent Development by Leading Companies

• In 2017, Finning South America, one of the largest Caterpillar equipment dealers globally, acquired a contract worth USD185 million by Lundin Mining Corporation, a Canadian metals mining company, for supplying nearly 70 pieces of new Caterpillar large mining equipment, including off-road trucks, and other equipment to the Candelaria open-pit & underground mines.

Market Dynamics

Key Driver: Burgeoning Private Investments in Mining Sector

The rise in investments in mining by private players is one of the primary reasons for the rapid development of the country’s mining sector. Additionally, in recent years, several global & regional mining companies have turned their attention to Chile's undiscovered mineral resources. Consequently, this has generated tremendous opportunities for mining equipment rental companies to offer their products & services. According to the International Trade Administration, Chile's copper mines are among the industry's largest contributors, with 72% of its mines owned by private companies and 28% by government companies.

According to COCHILCO 2019-2028 plan, to augment the country’s mining potential, the expected investment in mining for the next 10-years has been estimated to be USD72.5 billion. This includes 23 private, large & medium-sized copper mining projects for USD28.3 billion & 8 Codelco, government-operated projects, amounting to USD23.1 billion. Other minerals such as gold, silver, iron, lithium, and industrial minerals account for another 13 projects worth USD6.9 billion of investment.

Thus, the increasing investments by the private companies have widened the scope for the Chile Mining Equipment Rental market during the historical years and would continue to churn endless opportunities for mining equipment rental companies in the country during the forecast years.

Growth Opportunity: Rising Foreign Investments to Tap Vast Mineral Reserves

Chile is one of the largest producers of metals & minerals across the globe. In 2021, the country extracted more than 5 million tons of copper, 55 thousand tons of molybdenum, 40 tons of gold, and 120 tons of lithium carbonate. Moreover, the government has proposed additional 49 mining projects during 2020-29. Around 32% of these projects are for greenfield exploration, and 32 out of 49 projects are copper mining based. The total amount is expected to exceed approximately USD74 billion.

Moreover, BHP Group Ltd., which is already operating in Chile’s largest copper mine Escondida, announced an investment of more than USD10 billion in the country’s mining industry in 2022. These mega investments are expected to present immense opportunities to the mining equipment rental companies as mining companies spend over USD15 billion annually on technology, auxiliary services, and machinery to keep their operation running.

Key Questions Answered in the Market Research Report:

1. What are the overall statistics or estimates (Overview, Market Size- By Value, Forecast Numbers, Segmentation, Shares) of the Chile Mining Equipment Rental Market?
2. What are the region-wise market size, growth drivers, and challenges?
3. What are the key innovations, opportunities, current & future trends, and regulations in the Chile Mining Equipment Rental Market?
4. Who are the key competitors, their key strengths & weaknesses, and how do they perform in the Chile Mining Equipment Rental Market, based on the competitive benchmarking matrix?
5. What are the key results derived from surveys conducted during the Chile Mining Equipment Rental Market study?