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Australia's largest miners continue to pump investments into the sector

Australia's largest miners continue to pump investments into the sector"

Both BHP Billiton and Rio Tinto - two of the largest mining companies in Australia - have announced plans to spend more on boosting extraction and improving mining infrastructure.

The good news started when BHP lifted its forecast for iron ore output for 2013, which came after it announced a recent expansion in Western Australia has led to record production. The increased extraction rates call for 212 million tonnes of ore in the year through June. This is up from the original estimates for 207 million tonnes.

Meanwhile, Rio Tinto announced in its third-quarter financial report that it will likely spend another $5-$6 billion to increase its own iron ore output.

Together with BHP's announcement, more than $10 billion will soon be injected into Australia's mining sector.

During a press briefing, BHP chief executive Andrew Mackenzie stated the company is currently mulling over long-term plans to expand its Jimblebar mine, which could potentially produce as much as 55 million tonnes every year. He did not, however, give an indication as to when the railway and port construction would take place.

Analysts see the move to spend more as a response to a slight pickup in demand from China, which many thought could have peaked in recent years.

Bloomberg data shows exports to China, BHP Billiton's largest customer, rose to 75 million tonnes last month.

"You will continue to see these guys push out more iron ore," said Chris Drew, an analyst in Sydney with Royal Bank of Canada.

"You’ve seen an upgrade to iron ore expectations for the year, which should support earnings."

The improved spending could be a sign of better times to come for Australia's mining industry.

Interconnect Systems has more than 20 years of cable engineering industry experience, and can work with you to find the solutions that best meet the unique needs of your next mining rail project.

For more information, and for advice about choosing the right cable and wire harness and composite technologies, contact Interconnect Systems today by calling 1800 812 214.
 

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