Mining services’ life support running out in Australia
Much of Australia’s mining services sector and other businesses that rode the resources boom might be getting by on “life support”, but this year is shaping as a tipping point that will see company collapses increase, insolvency and industry experts say.
The mass corporate failures in the sector that were predicted as early as 2012 have not manifested and only 3 per cent of total insolvencies in financial 2014-15 related to mining, McGrathNicol transactions partner Anne-Maree Keane said. She was surprised so few formal insolvencies had materialised.
But many services companies had cut and restructured as much as possible in the last few years, and looming asset sales would change the industry.