In Ethiopia’s Kurmuk gold field, some 750 kilometers northwest of the capital Addis Ababa, workers are busy preparing to unearth 2.7 million troy ounces of gold – now worth about $10 billion as bullion prices recently hit record highs.
From Africa to South America, emerging economies like Ethiopia are racing to develop new mines, driving surging overseas orders for Korean excavators, loaders and drilling gear.
South Korea’s excavator exports in August surged nearly 70% from a year earlier, and industry experts expect demand to remain strong amid a global mining boom.
World Gold Council (WGC) data shows that global gold mining production volumes hit a historic high of 3,661 tons in 2024, while prices have kept climbing.
US futures for December gold delivery rose to $3,677.40 per troy ounce on the Chicago Mercantile Exchange (CME), marking an all-time high, on Monday last week.
KOREAN HEAVY MACHINERY MAKERS JOIN THE GLOBAL GOLD RUSH
According to Korean alternative data platform KED Aicel, Korea’s excavator exports amounted to $194.9 million in August, up 67.3% from the same month last year and extending the growth streak for four straight months since the trend reversed in April.
“(Our company’s) exports to emerging markets in the second quarter jumped 78% from a year ago,” said an official from HD Hyundai Construction Equipment Co.
KED Aicel data showed that Korean heavy machinery makers, including HD Hyundai Construction Equipment and its affiliate HD Hyundai Infracore Co., together shipped $617.2 million worth of excavators to other countries in the April-June period.
This marked the highest quarterly level since the third quarter of 2023.
Compared to a year and a quarter earlier, the value is 22.4% and 26.6% higher, respectively.
Global demand for Korean excavators is growing stronger in the third quarter after a 20.2% gain in May, 30.3% in June and 44.0% in July.
The rebound in Korean excavator exports has been fueled largely by new precious metal mine developments in emerging markets, particularly in Africa.
In July, HD Hyundai Construction Equipment said during its second-quarter earnings conference call that its sales climbed on the back of rising natural resource and infrastructure projects in emerging markets, citing “steady orders from countries including the Sudan, Algeria, Libya and Ethiopia.”
In March, the company won orders to supply a total of 100 units of 36-ton excavators from two mines in Ethiopia, where multiple large-scale gold mine development projects, including Kurmuk, are underway.
The country also boasts the second-largest population in Africa.
Thanks to the brisk excavator sales, HD Hyundai Construction Equipment reported 61.3 billion won ($44.2 million) in operating profit, without excluding one-off costs, in the second quarter, up 5% from the prior year, on sales of 967.7 billion won, up 13.4%.
Overseas sales account for more than 80% of the company’s entire sales.
Its sales in Africa and the Middle East zoomed 78% year-over-year, more than offsetting a 1% fall in North America and Europe.
Its equipment sibling HD Hyundai Infracore also saw operating profit and sales up 29.8% and 6.9%, respectively.
OUTLOOK REMAINS BRIGHT
Global demand for Korea-made heavy machinery is forecast to remain strong for a while as the global mining boom shows little sign of fading.
WGC estimates global gold mining production volumes in the second quarter would hit 909 tons, a record high for the period.
Riding the latest gold fever, some shuttered mines in Australia are readying to reopen.
Other mines are also gearing up to capitalize on soaring demand for critical minerals like copper, lithium and rare earth elements needed for the energy transition, electric vehicles and digital infrastructure.
China is at the forefront of the mining push by stepping up its hunt for resources overseas.
According to Mergermarket, the world’s second-largest economy invested more than $100 million in each of 10 overseas mines last year, up from five in 2022 and eight in 2023.
The surge underscores Beijing’s drive to lock in supplies of rare earths, lithium and other critical minerals vital to future industries, intensifying its race with Washington over strategic resources.
The futures price of copper, vital for power grids, also hit a record in July after the US government announced 50% import tariffs.
Global copper output is set to rise 2.3% this year to the largest-ever 23.5 million tons on new capacity in Congo, Mongolia and Russia, according to the International Copper Study Group.
By Tae-Ho Lee
thlee@hankyung.com
Sookyung Seo edited this article.
