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The CEO of world number two miner Rio Tinto last week told an investor conference the quality of Chinese mining equipment is catching up to that of the major US manufacturers.
The Wall Street Journal quotes Rio Tinto (LON:RIO) CEO Sam Walsh as saying that the Anglo-Australian giant has been increasing purchases of heavy equipment and other items from India and China, and has found the quality impressive.
Among RIO’s purchases were heavy-duty trucks, equipment for loading ships and rail cars that carry ore.
Without naming any names, Walsh said “funnily enough” on the rail cars “the quality actually was much higher” compared to the miner’s traditional supplier: “Instead of spot welds, for example, on the sheet metal they were actually continuous welds.”
A JP Morgan analyst said that quality at Chinese equipment makers can vary widely, but “it’s incredible the speed at which they are coming up the quality curve.”
It’s a development that spells tougher competition down the line for a host of mining equipment suppliers, including the likes of Caterpillar (NYSE:CAT), Joy Global (NYSE:JOY), Komatsu and Liebherr.
Leaders CAT and Joy Global are having a tough year. In October, world number one supplier Caterpillar lowered guidance and reported revenue numbers below analysts expectations, while Joy Global last week reported a 26% slump in sales as the slowdown in mining capital expenditure continues.
Other manufacturers like Belarusian mining equipment manufacturer Belaz are also muscling in on the traditional leaders turf. Belaz is testing a truck which will be the world’s largest capable of carrying a 450 tonnes payload.
Image of US$300,000 BZK D45 dump truck courtesy of Beijing Zhonghuan Kinetics Heavy Vehicles.
7 Comments
poormaninvestor
This story is just not surprising. Look what happened when the auto world came to our door and the snowmobile and marine industry.
Right now China is trying to raise the bar at an economic price. They can do do this because of deep government pockets. This will improve the products overall in the short term but what happens when they have to stand on their own.
Hope I didn’t ramble too bad.
Poorman investor
mijanko
Not in our experience. My company closed down a mature Canadian operation and sent the work to China not long ago. The production and quality issues have not been solved even after 2 years of our people being there. I think it depends how standard your builds are whether they will be successful. The issues are systemic. The turnover was too high and in fact nearly 20 employees were fired for releasing company engineering info. out to competitors.
Ron Kelly
I bought a Chinese loader 3 years ago and it was a third of the price of Cat . Total repairs so far are about $600. Im very happy with it.
headframe
Of course they are cheaper. No R&D required. They stole most of the designs from the top North American Manufacturers who were stupid enough to ship their manufacturing to China.
John Gillender
“Headframe” I could not agree more; hey, Sam Walsh where do you think the Chinese got the design for those trucks you bought. Just another company ruining the careers of companies and employees worldwide.
Scott Evans
Their quality may be getting better and they initially have a lower purchase price, but where will they be at 5000,10000 or 20000 hours? We are just starting 4th life rebuild program of Cat Underground machines
sone henry kwene
Sir/Madam, we shall appreciate your urgent concern on
this request. We need a company that can supply us these equipment, Gold CIL & CIP turnkey plant ( a set) and the list below.
1.GRADER MOTOR:
Model No. Base Power
14M 193 kW (259 hp)
2.WHEEL DOZERS
Model No. G ross Power
834H 414 kW (555 hp)
3. ROTARY DRILLS
Model No. Bit Load
MD6240 Up to 24 000 kg (up to 52,911 lb)
4.HYDRAULIC SHOVELS
Model No. Max Bucket Capacity
6015 / 6015 FS 7 m3 (9.2 yd3)
5.ExcavatorModel No. Net Power
336E 217 kW / 291 hp
6.HIGHWALL MINERS
WH300
7.WHEEL LOADERS
988H 11.4 tonnes (12.5 tons)
8.ROPE ELECTRIC Shovels
Model No. Payload Capacity
7295 45.4 tonnes (50 tons)
9.DRAGLINES
Model No. Bucket Capacity
8000 32 m3 (42 yd3)
10.MINING TRUCKS: ELECTRIC DRIVE
MODEL No. Rated Payload
793F AC 218 tonnes (240 tons) ( 6 mining trucks)
11.WHEEL TRACTOR SCRAPERS
Model No. Capacity Heaped
621H 18.4 m3 (24 yd3)
12.TRACK-TYPE TRACTORS
Model No. F lywheel Power
D8R 228 kW (305 hp)
My regards,
SONE HENRY KWENE
CHIEF EXECUTIVE OFFICE
RURAL DEVELOPMENT FOUNDATION
YAOUNDE – CAMEROON
[email protected]
TEL. 00237654029537