Mining Sector Insights A Comparative Snapshot of Australia China and US Markets

The mining sector is our critical sector in Australia. It fuels infrastructure, powers the energy transition, and supports everything from advanced manufacturing to technology. But in a world of constant change, with commodity prices swinging, labour costs rising, and global demand shifting in ways that can keep executives up at night, is Australia’s last pillar of the large-scale private sector at risk? Can a smarter supply chain strategy help ride the waves of volatility, in a market that has potentially over capitalised in the electric transition?

Trump’s recent speech to the UN was no doubt cringe inducing, but with the global push back from large Auto manufacturers that include Mercedes and Porsche on the current EV policy combined with Trumps very vocal climate change hoax narrative, many mining operations across nickel, rare earths, and other core commodities synced to the 4^th industrial revolution could have investors worried re NPVFC and IRR.

Here in Australia, miners are facing a bit of a double challenge. On one hand, costs are creeping up, labour is more expensive, inflation is persistent, and operational costs are rising. On the other hand, commodity prices have taken a bit of a dip, which can hit revenue if companies aren’t careful. The typical narrative is this is where procurement can really shine using tactics such as locking in long-term supplier contracts to smooth out labour and energy costs, while digital procurement tools should highlight savings in indirect spend. Even with commodity prices down about 9% year-on-year, surely there’s an upside with clever negotiation on equipment, energy, and consumables can lock in better deals until prices rebound.

The question is, will prices rebound, and can procurement really achieve such outcomes when forecasted operational demand will be decreasing. If we look at the global economy, the consumer is in trouble, which means the commodities that go into making finished goods such as cars, phones, and new houses etc will have less demand. It is likely consumer will hold their car for longer before changing it, new phone upgrades will decrease and housing, well we all know the issues here. The hard truth is most operational benefits will come from technology as indicated, yet this technology will further increase unemployment, which then adds further deflationary pressure on demand and taxes.

Energy is up over 20% in the past year, subcontractors also will be inflationary as the skills shortage and ever-increasing demand for skills persists, and interest rates at 3.6% will unlikely make financing expansion projects any easier, as this is the short end of the curve. The long end will rise (SKILLSOOP prediction) as inflation continues to surge, ensuring the WACC does not benefit from the RBA’s decision making to assist government borrowing. In addition, stagnant productivity and contracting demand would make any growth business case hard to sign off.

Across the Pacific, the US mining scene has its own set of challenges. Interest rates are higher (3.6% projected), inflation is hovering around 2.1%, and labour costs continue to rise. Procurement teams in the US may look beyond domestic borders to source materials globally, reducing exposure to wage inflation, while Trumps polices re green energy may help over time to protect margins.

China is always an interesting case because the market is massive but unpredictable. GDP growth is slowing to around 5%, and commodity prices are volatile, which can make revenue planning tricky. Inflation isn’t extreme yet, and interest rates remain relaxed, which helps with financing projects.

No matter where a mining company operates, keeping an eye on the right economic indicators is critical. Some of the key numbers include GDP growth, industrial production, and infrastructure investment, especially in China. Inflation measures (CPI and PCE), interest rates, labour costs, and commodity prices are essential everywhere. Exchange rates and shipping indices affect the cost of moving materials, while government policies and ESG regulations shape the landscape for suppliers and contracts.

Here’s a quick snapshot of current figures:

• Australia: GDP 1.8% YoY, CPI 2.1%, cash rate 3.6%, AUD USD 0.66.

• US: GDP +3% (Q2 2025), PCE inflation 2.1%, federal funds rate 3.6%.

• China: GDP 5.2%, moderate inflation, accommodative monetary stance.

  
  

These numbers aren’t perfect as they can change, be revised, or differ in measurement, but they give a sense of the environment mining companies need to navigate.

Key Categories that IMPACT mining

The mining sector trends ripple through key categories like explosives, plant & equipment, and energy is crucial for strategic procurement. Across Australia, China, and the US, each market presents its own mix of challenges and opportunities, shaping how category managers approach sourcing, supplier relationships, and long-term planning.

Explosives sit at the heart of mining operations, and their procurement is highly sensitive to cost pressures, Labor availability, and industrial activity. In Australia, the environment has calmed a bit: inflation has eased to 2.1%, and interest rates are stable at 3.85%. This stability allows for better budgeting and forecasting, and suppliers may feel confident investing in efficiency or capacity expansion. In China, the low interest rates (around 3%) and near-zero inflation (0.1%) create favourable conditions for capital expenditure, while slightly declining labour costs can make production and logistics more competitive. Yet a slowdown in manufacturing and construction signals potential risks, requiring flexible procurement strategies that balance supply continuity with careful inventory management.

The US presents a tougher landscape. Persistent inflation, high interest rates, and a tight labour market are driving up costs for raw materials, energy, and skilled personnel. Procurement teams must navigate these pressures while seeking opportunities in automation, logistics efficiency, and supplier innovation to offset rising operational expenses. Across all regions, the common thread for explosives is clear: strong supplier partnerships, strategic planning, and investment in technology are key to managing costs and maintaining resilience.

When it comes to Plant & Equipment, Australia’s market reflects similar balancing acts. High interest rates make outright purchases expensive, nudging companies toward leasing or rental models, while rising labour costs increase maintenance and operational expenses. Yet falling commodity prices—down 9% year-over-year—offer opportunities to negotiate better pricing on new machinery. Smart procurement strategies involve optimizing financing, leveraging cost reductions, and exploring efficiency-enhancing investments such as automation and predictive maintenance.

In China, investment decisions are more cautious. Industrial confidence is subdued, but deflation in producer prices (-3.6%) and low interest rates (3%) create opportunities for competitive pricing on machinery and spare parts. Stable labour costs also help keep operational expenses predictable. Here, procurement should prioritize investments that improve productivity and reduce long-term costs while monitoring demand trends in sectors like construction. The US Plant & Equipment landscape presents rising labour and inflationary pressures alongside high borrowing costs.

Durable goods orders have declined, reflecting cautious investment. But these challenges can push companies toward more efficient, automated equipment. Procurement teams can seize this opportunity by partnering with innovative suppliers and carefully monitoring commodity markets such as steel and energy, balancing cost control with strategic investment in resilience and efficiency.

Energy, particularly utilities, is another high-stakes category in mining. In Australia, high interest rates (3.85%) make funding infrastructure projects expensive, though lower inflation (2.1%) and falling commodity prices help ease operational costs. Labor remains tight, so securing skilled personnel is critical. Procurement must balance cost optimization with strategic deployment of capital, ensuring supplier resilience and operational efficiency. China’s energy sector benefits from low inflation (0.1%), stable interest rates (3%), and slightly falling labour costs.

This creates a supportive environment for utilities to invest in infrastructure while keeping supply chain costs predictable. Procurement strategies here should leverage these favourable conditions but also include robust contingency planning against global commodity volatility and policy changes that could affect infrastructure spending. The US shows strong energy demand thanks to solid GDP growth and consumer confidence, but this comes with higher operational costs driven by inflation, rising labour costs, and elevated interest rates (4.5%). Strategic procurement here focuses on resilience and efficiency—investing in digitalization, automation, and smart supply chain solutions to mitigate rising costs and supply risks.

Across all three categories, explosives, plant & equipment, and energy, the common theme is clear: mining procurement can no longer be purely transactional. Success requires a strategic approach that balances cost control, risk mitigation, supplier collaboration, and investment in technology. By understanding the nuances of each market and category, procurement teams can ensure supply continuity, optimize costs, and support operational performance, even in a volatile global environment.