Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The industrial revolution opened new doors to the different industrial sectors. The rise in industrialization over the years has complimented the growth of the mining equipment market. Natural resources such as coal, petroleum, natural gas, and uranium have gained popularity in the last 50 years in most industries such as manufacturing, electricity, automation, aerospace, and defense. Mining activities are predominant in regions such with large volumes of natural resources such as Australia, Indonesia, U.S, and parts of South America. In the last two decades it has been identified that mining activities should be carried out ensuring safety of the miners as well as the equipment. Government regulations concerning mining have also helped to avoid mining hazards. A report on the mining equipment market published by Allied Market Research offers valuable insights about the market such as market share, size, and growth. The demand for metal and mineral commodities is on the rise owing to technological advancement and the growing industrial sector worldwide. Technological advancements have boosted the growth of the mining equipment market as reliable, cost-effective, and time-efficient mining processes can be carried out with ease.
Mining equipment manufacturers relying on mergers and acquisitions for expansion
In any industrial sector or market, mergers, collaboration, and acquisitions influence the growth of the individual companies involved or help them getting to the set goal. Mergers and acquisitions create several opportunities for companies eyeing to expand business and increase their market share. A lucrative collaboration or an acquisition can heavily influence the growth of a company.
The mining equipment market has also witnessed a series of mergers and acquisitions in recent times. The aim is to expand business and generate more revenue. Expanding business activities to different geographical markets is easier with a partnership or a collaboration with a local manufacturer with expertise about the regional market.
In July 2016, Komatusu, a leading manufacturer of mining equipment based in Japan announced its plans to acquire U.S mining equipment manufacturer Joy Global. Joy Global, is a leading manufacturer of surface and underground mining equipment. Komatsu will acquire 100 % ownership of Joy Global and the deal will be complete in mid-2017 after the stakeholders examine the details of the deal. The acquisition will help Komatsu to achieve the goal set by the company that aims to strengthen the core mining equipment business and achieve sustainable growth. Joy Global specializes in manufacturing advanced parts and equipment for surface and underground mining. The company’s material handling system and components used in a wide array of applications compliment the products manufactured by Komatsu. The integrated technology, service and solutions are an essential factor in operations in a number of markets such as energy, industrial minerals and hard rock.
Komatsu, has been involved in the industry since 1921. The organization has expanded since then by acquiring mining manufacturers and by distributing businesses operating in regions with a strong presence of mines. The company’s portfolio does not include underground mining and with the acquisition of Joy Global, the company can achieve and explore the opportunities in underground mining.
The demand for mining equipment has declined from the peak owing to economic slowdown in developing countries and low price of commodities. However, the growth of urbanization and population will boost the mining equipment market worldwide.
Move to expand underground mining equipment product line
In July 2016, DBT Deutsche Bergbau-Technik GmbH, a leading worldwide supplier of underground mining technology and equipment revealed that the company has completed the acquisition of Long-Airdox Companies with a goal to expand its existing product line and manufacturing capabilities. Bill Tate, Managing Director of DBT explained the motive of this move and disclosed that the move will help the company to expand its product line significantly and strengthen the company’s position in the market and lay a strong foundation for the growth of the company in the future. The move will also help the company manufacture all kinds of products and mining equipment and can potentially make the company a one-stop source of advanced mining solutions and equipment.
Products manufactured by Long-Airdox such as battery scoops, continuous miners, shield movers and continuous haulage systems will expand the existing product line of DBT Deutsche. The acquisition will increase DBT’s production capacity, especially in the U.S and assist in meeting the demands of the customers. In a competitive mining equipment industry, the company has all the essential tools to remain a strong market player. By integrating its technology along with manufacturing and market expertise, the move could potentially set a new benchmark in the mining equipment industry in terms of quality and customer satisfaction. DBT will now aim to develop and improve their product and prioritize product development.
Underground mine rescue equipment launched
The mining industry is the core of several industries that rely heavily on natural resources such as coal, natural gas, and petroleum. With increase in mining activities, it is essential to avoid hazards and disasters at the mine site.
In September 2016, Draeger launched a mine rescue vehicle which is termed as MRV 9000 by the company. The vehicle offers secure transportation close to the mining incidents without the need to activate breathing apparatus. This gives the rescue teams on site more time to complete their operations. The company revealed that the new mining vehicle is a milestone as far as mine rescue is concerned. Kent Armstrong, the company’s global business manager throws light on the topic and reveals that the rugged underground vehicle is a life support system and reduces time to rescue by transporting mine rescue teams closer to the mining incident.
Urbanization and industrialization have significantly contributed to the growth of the mining equipment market. The demand for the mining equipment is gradually increasing as the economic conditions around the globe have improved. Technological advancements and the growing demand of coal for heating and electricity generation will add to the growth of the mining equipment industry. With rise in mining activities worldwide, it is important to utilize the natural resources in an optimum manner.
