Germany Chancellor plans lithium deal with Serbia after Rio ruling
Olaf Scholz plans to visit Serbia this week to secure supplies of lithium that are critical for the nation’s energy transition and auto industry.
A recent survey of buyers and senior decision-makers from over 500 mines worldwide, conducted by Trimetric. asked respondents to outline their expectations towards switching their major equipment manufacturer within the next five years.
The results show quite different potential for heavy mining equipment manufacturers to win new business and market share across the six regions surveyed. Figure 1 below outlines the average responses across six mining regions and shows the shares of respondents anticipating switching to a different supplier, or remaining with their current manufacturer, over the next five years.
Australia has the lowest share of mining companies who are intending to switch away from their current supplier. This region had 71% of respondents who cited ‘definitely yes’ and ‘probably yes’ to remaining with their current supplier.
Respondents were also asked to outline satisfaction ratings given to primary equipment suppliers across a range of 16 different factors that cover: product quality, availability of parts, and on-time delivery and installation of equipment. Ratings ranged from 1-being very dissatisfied, to 10-being very satisfied. Manufacturers in the region performed well in important factors examined in the survey, such as product quality/reliability and the availability of replacement parts; these results show the difficulty for competing suppliers to break into the current market.
The North American region had 59% anticipating keeping the same manufacturer. This result is supported by the high satisfaction ratings respondents had given their OEMs over a wide range of factors. US respondents had the highest ratings of all other countries surveyed, and with strong loyalty towards current suppliers it is a hard market for competing suppliers to crack.
The Asian market, however, provides the greatest opportunities for equipment manufacturers and suppliers to win business. This region had the greatest number of respondents who anticipated switching suppliers within the forecast period, with 52% citing both ‘definitely yes’ and ‘probably yes’. This region also had the greatest share of respondents who were unsure – with 30%. An insight into these attitudes can be found in another section of the survey where respondents were asked to identify the top areas where suppliers need to improve. Product quality received the most nominations from Asian respondents, as an area in need of improvement, followed by a supplier’s ability to support cost minimisation. These areas are vital in today’s mining market when companies are looking to cut costs wherever possible.
In Africa 39% anticipated a switch and this region follows Asia with the second highest share of companies who are likely to switch within the next five years. Attitudes in Africa are similar to those in Asia, as mining companies nominated the ability to support cost reduction and product quality as two crucial areas where suppliers need to improve. Dissatisfaction towards suppliers regarding these factors is causing mining companies to consider alternative suppliers within the next five years.
Nez Guevara, Senior Mining Analyst at Timetric’s MIC, explains: “Mining companies are continuing to reduce costs and as a result are limiting their investment in new equipment while focusing on improving current equipment utilisation. OEMs looking at winning new business will find it difficult to dislodge the incumbents in markets such as Australia and the US, but better opportunities exist in Asia and Africa provided they can deliver in areas such as product quality and reliability, and by supporting mining companies with cost minimisation.”
