Mining CapEx is Over The Past Year. What Happens Now?
Capex growth and new capital expenditure in the private sector both dropped in FY2024. With global markets in flux, what’s the outlook heading into FY2025? And does it matter for your business?
The last five years have proven challenging for the mining sector. Following the volatility created by COVID-19, material prices have been fluctuating across the board, and with them, capital expenditure.
After a sizeable drop in 2020, total private capital expenditure in Australia has continued to grow each year until now. It’s only in the last year that growth has slowed, with annual capex growth decelerating to 0.6%, a significant drop from the 11% growth observed in mid-2023.
For the mining industry we’re seeing a similar story, with one significant difference. Where growth has simply slowed for the wider industry, the mining industry saw a drop in total capex. Additionally, mining sector capex growth dropped 0.6% in the first quarter of 2025, following a steeper 1.9% decline the quarter before that.
The question is, is this a sign of a long-term trend, or just a bump in the road for industry growth?
What’s Causing Stagnation?
There are a lot of theories. Uncertainty in the markets related to import tariffs, a drop in demand for certain resources, a drop in investment in the mining industry are all potential reasons for a decline in capex. A lot of investment is also moving into data centres, an area of expenditure that’s up more than 160% over the last year and a half.
Expenditure on equipment, plant and machinery also fell 1.3% across all industries, which could indicate a lower need for new equipment.
Additionally, in an analysis report published in February 2025, Wespac IQ highlights the ‘weaker demand for certain commodities as global transition to clean energy gathers pace, and uncertainty relating to energy policies in that context.’
In other words, demand for fossil fuels is down, and mining companies may be spending less on equipment because of it. There’s a lot of uncertainty around this, obviously. Policy changes in regard to renewable energy targets, changing commercial demand for renewable technology, and changing global sentiment both for and against fossil fuels make it hard to plan decisively for the long term.
And while this isn’t a definitive answer for why capex growth is stagnating in the mining sector, it does give us good insight into the current state of things.
What Action Should You Be Taking?
Despite uncertainty, the Australian Bureau of Statistics is predicting an increase in mining capital expenditure over the next quarter. Demand for renewables is increasing, and with it demand for copper, lithium, nickel, cobalt and rare earth elements. Many companies have already made a move into mining for these minerals, and there’s a good chance we’ll see this reflected in capital expenditure.
In addition, many companies and consumers are investing in renewable technology themselves. In 2024, nearly one in ten (9.65%) new car sales are Electric Vehicles, a number that’s only growing with time.
In mining, many companies are turning to solar to power utilities like communications, security, lighting, and more, reducing power costs and creating flexible, future-proof systems. Because while demand for fossil fuels may be decreasing, operating costs can be offset by using free renewable energy.
Are You Making the Move to Renewable Energy?
If you haven’t considered renewable energy yet, it might be time. At MTGA, we’ve helped mine sites all across the country make the transition, delivering comprehensive, robust solar powered solutions tailored to our client’s needs. For more information, view our website or get in touch for a consultation.
If you need equipment you can rely on 24/7, discuss your needs with our team today. We’ll answer any questions you have and point you in the right direction.
