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Mining, metals automation industry needs support

The growth trend in the mining and metals industry that spurred demand for automation, instrumentation, and operational software came to a halt in the last quarter of 2008 due to the global financial crisis, according to a report from the ARC Advisory Group.

Through the first few months of 2008, demand for metals worldwide continued to grow. Emerging market demand was growing fastest as manufacturers in Asia and Eastern Europe increased production of industrial and consumer goods, said the report, called Automation Expenditures in Mining and Metals Worldwide Outlook.

However, the situation has changed throughout the past year. Worldwide demand for steel in the first quarter of 2009 dropped by nearly 25 per cent, causing major steel producers to see profits plummet.

The reduced demand for iron and steel has led to a dramatic drop in both the demand and price for iron ore, ARC said.

“Through 2007, suffice it to say that no one saw the downturn coming, in terms of investment spending in mining and metals,” said ARC analyst and principal report author, Dick Hill.

“With the global economic downturn as a backdrop, it is understandable that mining and metals companies have cut back the aggressive growth plans of pre-2008. However, spending will still be needed in 2009 with stronger spending to begin in 2010 and beyond.”

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