US Mining and Energy Extraction Sector

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 22,472 mining and energy extraction establishments in the US remove natural-occurring minerals, metals, crude petroleum and natural gas from the earth. Establishments also provide support activities such as surveying and mapping, site preparation, drilling and blasting, well casing and mine wall shoring, inspection, maintenance and cleaning, demolition and waste removal, and land reclamation.

Opposition to Development

Companies may face resistance from area residents and lawmakers regarding the proposal to start a new mining or extraction project.

Environmental Compliance

The mining and energy extraction sector is directly impacted by a wide range of environmental regulations that affect production site permitting, operation, and reclamation.

Industry size & Structure

The mining and energy extraction sector comprises 22,472 establishments that employ 595,000 workers and generate about $597 billion in annual revenue, according to government sources.

    • The mining and energy extraction sector represents 1.9% of the nation's Gross Domestic Product (GDP) and employs less than 1% of the country's workers.
    • The sector is concentrated: the 20 largest mining and energy extraction firms represent 34% of revenue. The 50 largest firms represent 50% of revenue.
    • In addition to employer establishments, the mining and energy extraction sector has 67,750 owner-operated establishments with no employees. The majority of nonemployer establishments are in the subsectors of oil and gas extraction (65%) and support services for mining (27%). The owners of nonemployer establishments typically perform the work or subcontract labor for large or complex jobs.
    • Nearly 29% of all US mining and energy extraction establishments are in Texas.
    • Employment in the mining, quarrying, and energy extraction sector is forecast to decline by 2.6% between 2022 and 2023, primarily due to the sharp decline in employment by US coal mines, according to the Bureau of Labor Statistics.
                                    Industry Forecast
                                    US Mining and Energy Extraction Sector Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Nov 14, 2024 - Jobs Flat Amid Rising Wages
                                    • Employment by mining, quarrying, and oil and gas extraction firms was relatively flat in October, up just 0.3% compared to a year ago, while average sector wages rose 3.8% in September year over year to $36.89 per hour, according to the latest US Bureau of Labor Statistics data. Mining was among the service sectors tracked by the Institute for Supply Management’s Services Purchasing Managers’ Index (PMI) to report growth in October. Looking ahead, sales for the US mining and energy extraction industry are forecast to grow at a 3.64% compounded annual rate from 2024 to 2028, slower than the growth of the overall economy, according to the latest forecast from the Interindustry Economic Research Fund.
                                    • According to the US Energy Information Administration (EIA), natural gas production in the US will decline in 2024 amid record high demand. In November, the agency projected that dry gas production would ease from a record 103.8 billion cubic feet per day (bcfd) in 2023 to 103.3 bcfd in 2024 as some producers cut back on their drilling activities after average gas prices sank to a 32-year low in March. In 2025, the EIA projects output to rise to 104.5 bcfd. The agency also projected domestic gas consumption would rise from a record 89.1 bcfd in 2023 to 90.0 bcfd in 2024 before easing back to 89.6 bcfd in 2025. If the EIA’s projections are correct, 2024 would be the first time output declines since 2020, when the pandemic cut demand for the fuel. It would also be the first time demand increases for four years in a row since 2016.
                                    • According to Goldman Sachs Research, the price of gold has soared this year and is poised to continue climbing into early 2025, rising to new record highs. The price of gold per troy ounce topped $2,650 in mid-October -- up from about $2,000 in mid-January -- and is expected to reach $2,700 early next year, buoyed by interest rate cuts by the Federal Reserve and gold purchases by emerging market central banks, according to GSR. Long seen as a hedge against geopolitical and financial risks, investors are buying up gold amid mounting tensions in the Middle East and economic uncertainty. Central banks have also been buying gold, which has helped to drive up the price.
                                    • According to Mine Safety and Health Administration (MSHA) data, 2024 is on track to be a record-low year for mining fatalities. As of mid-August, there were 13 fatalities at US mines, seven of which took place at coal mines and six at metal/nonmetal operations. Six of the last seven mining fatalities overall took place at coal mines, according to the agency. Of the six fatalities at metal/nonmetal operations, two occurred at sand and gravel operations, with the other four occurring at a variety of sites, including shale, crushed/broken limestone, crushed/broken stone, and phosphate rock mines. By state, West Virginia has the most mining fatalities so far this year, with three, all in coal mines. The all-time low for mining fatalities in a single year was 25 in 2016, according to MSHA.
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