Research on Global and China Mining Equipment and Machinery Industry

26-Aug-2012 | General Article (Non-News)

In spite of gloomy global economic situation, the mining equipment & machinery industry has shown relatively stable growth on account of the three as follows: first, most of the metal ores have been mined for half a century or even longer, so the ore grade declines year by year. For example, the copper ore grade was 0.91% in 1985, but it falls to below 0.75% in 2012; it is expected to drop to 0.70% in 2015. The copper output can not be raised, and the copper price remains comparatively stable. Once the demand increases slightly, the copper price is likely to soar. To raise the output, the mines have to apply more sophisticated equipment; if the grade declines severely, they may replace all old equipments with new ones.

Second, in the mining equipment & machinery industry, the working conditions are harsh and the equipment has rather a short lifespan. For instance, a shearer's lifespan lasts five years, while the drum bitting of a roadheader only has the lifespan of 2-3 months.

Third, the follow-up maintenance costs and service costs of mining equipment & machinery are quite high. Take a shearer as an example, the maintenance costs in five years double the first purchase price. For international large-sized mining equipment manufacturers, over half of their revenue comes from after-market services.

It is better that the mining equipment is supplied by complete sets. If all of the equipment is provided by the same manufacturer, the subsequent maintenance costs can be reduced greatly. Therefore, mining equipment manufacturers often merge and acquire other companies to expand the market; every giant has experienced 10-20 M & A cases. At the end of 2010, Caterpillar acquired Bucyrus for USD8.8 billion; in 2012, it acquired ERA Mining Machinery for USD887 million. In early 2012, Joy Global acquired IMM.

There are numerous mining equipment manufacturers in Northern Europe, and most of them are located in Finland, Sweden, Denmark and northern Germany. Sandvik and AtlasCopco are Swedish manufacturers, Metso and Outotec are Finnish manufacturers, while FLSmidth is a Danish manufacturer. Besides, there are many small producers. Although European sovereign debt crisis spreads and economies run badly, these manufacturers have seen prosperity, with the new orders and revenue almost growing by 20% each in Q1 2012.

Chinese mining equipment & machinery manufacturers are mainly coal mining machinery manufacturers. In China, there are over 100 coal mining machinery manufacturers, and 95% of coal mining machinery is produced by China independently. Coal mining machinery includes four major categories, namely roadheaders, shearers, scraper chain conveyors and hydraulic supports. Tiandi Science & Technology and Sany are main roadheader manufacturers. Tiandi Science & Technology is also a shearer giant. Roadheaders and shearers are with high technical content, while scraper chain conveyors feature low technology, so there are many scraper chain conveyor manufacturers. Most of hydraulic supports are involved with low technology, but the ones with the resistance of more than 10,000 KN require high technology. Also, there are many hydraulic support manufacturers.

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Research on Global and China Mining Equipment and Machinery Industry


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