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Mining Supply and Services Sector

Mining equipment companies try to dig out from downturn – by Rick Barrett (Milwaukee Wisconsin Journal Sentinel – January 11, 2014)

http://www.jsonline.com/

Outlook remains rocky for Joy Global, Caterpillar

If there’s a bottom to the mine shaft for Milwaukee mining equipment companies, which saw business plummet in 2013, they haven’t found it. Joy Global Inc. ended the year with net income down 30%, to $533.7 million, or $4.99 a share, and revenue down 12% to $5 billion.

Caterpillar Inc., which has its mining equipment division based in South Milwaukee, reports fourth-quarter and full-year earnings on Jan. 27. In its most recent quarter, the company said earnings plunged 44%, to $946 million, or $1.45 a share, and that revenue would be down 17% for the year.

Caterpillar shut factories and cut its workforce by some 13,000 people, including hundreds of jobs in Milwaukee and South Milwaukee, where it manufactures some of the world’s biggest mining machines.

Until 2013, rising commodity prices fueled a boom for Caterpillar, based in Peoria, Ill., and Joy Global. Then China’s economy sputtered, undercutting demand for mined materials and the machines used to extract them from the ground.

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BRAZIL’S VISION: BUILD HUMAN CAPACITY IN SCIENCE & TECHNOLOGY: Impacting Laurentian University – by Dick DeStefano (January 2014)

Dick DeStefano is the Executive Director of Sudbury Area Mining Supply and Service Association  (SAMSSA). destefan@isys.ca 

Science without Borders (SwB)

Funded primarily by the Brazilian Government, the SwB scholarship program was launched in July 2011. The program to send 101,000 Brazilian students to study internationally in the science, technology, engineering, and mathematics (STEM) subjects by 2015. The Government of Brazil is funding 75,000 scholarships and a further 26,000 are being funded by the private sector.

During his official visit to the Federative Republic of Brazil from April 22 to 28, 2012, His Excellency the Right Honourable David Johnston, Governor General of Canada, announced that Canada will welcome 12,000 Brazilian students at the undergraduate, doctoral and post-doctoral levels under the SwB program by 2015.

I would like to applaud the vision and commitment Brazil has demonstrated by implementing such an innovative and brilliant strategy that will make them a major force within the next decade in the global marketplace.

In the past ten years as executive director of SAMSSA I have attended workshops and seminars lamenting the lack of solutions we have in Canada to rebuild our human capacity and solve our long term need for new highly skilled personnel. The Brazilians are showing us that the answer lies in a concentrated investment in its newest generation of undergraduate students.

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NORCAT lands ‘exciting’ new tenant – by Laura Stricker (Sudbury Star – December 23, 2013)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

A British Columbia-based company is moving one of its projects to Sudbury. Sky Vertical Technologies Inc., a subsidiary of Sky Harvest Energy Corp., is setting up its vertical wind axis turbine testing and manufacturing facilities to space owned by the Northern Centre for Advanced Technologies (NORCAT), it announced in a release earlier this month.

“Our CEO (of Sky Vertical) Kyle Loney lives in Sudbury. He is very integrated in the mining business himself and he knew of NORCAT and approached them. That’s how we came to learn of them,” William Iny, Sky Harvest’s president, told The Star this week.

What partially distinguished NORCAT, Iny said, was its 70,000-square-foot development facility.

“They’re not just involved in the mining sector, which we’re very interested in, because our vertical turbines have application for the mining ventilation shaft. Their high-tech facilities for … research and development and for manufacturing, their intellectual contacts within the technology field, were really impressive.

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Sudbury entrepreneurs recognized for their contributions – by Jonathan Migneault (Sudbury Northern Life – December 06, 2013)

http://www.northernlife.ca/

Darryl Lake never thought of himself as an entrepreneur, but in the early 1990s, his career as an academic took an unexpected turn with his effort to end the Sudbury brain drain of young talented people.

In 1995, Lake left his position as Cambrian College’s dean of health sciences, trades and technology, and started the Northern Centre for Advanced Technology (NORCAT).

The move was a big gamble. Lake left a comfortable job to start a non-profit organization at a time many others were going under. “The economy was a disaster,” Lake said about that period. “There were no jobs for young people.”

To establish a stable base of revenue for NORCAT, Lake brought over the Occupational Health and Safety Resource Centre, and the Ontario Centre for Ground Control Training, he had started at Cambrian. NORCAT soon became one of the world’s leading occupational health and safety training centres. With that base, NORCAT was able to start mentorship programs for young entrepreneurs and an intern program that had a 100-per-cent conversion rate to full-time jobs for interns who completed it.

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Mining firms to spend $297M in ’13 (Regina Leader-Post – December 4, 2013)

http://www.leaderpost.com/index.html

Mining exploration and development companies are expected to spend about $297 million in Saskatchewan in 2013, down from $324 million in 2012, according to preliminary estimates released by the Saskatchewan Geological Survey.

This year’s expenditure estimate “reflects the difficulty many junior companies continue to have in raising exploration capital,” said the report, which was released at the Saskatchewan Geological Survey’s open house in Saskatoon Tuesday.

Expenditures for mineral exploration and evaluation projects in Saskatchewan in 2013 are also expected to be lower than the $293 million spent in 2011 and the $321 million in 2010.

“Despite the decrease, exploration spending in Saskatchewan continues to be well above historic levels,” the report said. “In the past decade over $2.7 billion has been spent on exploration and evaluation programs, a dramatic increase when compared to the total $674.5 million spent in the 20 years previous.”

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UPDATE 2-Mining slump weighs on Nordic suppliers Sandvik, Metso – by Niklas Pollard and Johannes Hellstrom (Reuters India – October 24, 2013)

http://in.reuters.com/

STOCKHOLM, Oct 24 (Reuters) – Swedish machinery and tool maker Sandvik said on Thursday a sharp fall in demand from a shrinking mining industry was showing signs of levelling out.

But the slump still hit its earnings, and led to a fall in orders at Finnish rival Metso, which also stepped up a programme of cost cuts.

The global mining industry is under pressure to reduce overheads as demand for raw materials levels off after a decade of strong growth, and sector heavyweights led by BHP Billiton and Rio Tinto have slashed capital spending by billions of dollars.

The cuts have translated into job losses and plunging order intakes for a cluster of Nordic suppliers.

Sandvik, which together with Swedish peer Atlas Copco supplies more than half the world’s underground mining gear, said the order intake in its mining business fell 17 percent year-on-year in the third quarter. The rate of decline eased from the second quarter, however.

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Caterpillar hit by mining sector’s woes – by Rachelle Younglai (Globe and Mail – October 24, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

The mining industry’s woes are spreading with Caterpillar Inc. becoming the latest casualty of weak metal prices.

The company, often viewed as an economic bellwether, on Wednesday slashed its sales forecast and reported a profit shortfall this quarter because of less demand for its giant tractors and equipment used to move large pieces of earth.

“This is an unfortunate consequence of what is going on at the top of the food chain,” said Blake Langill, mining leader with Ernst & Young LLP.

A combination of lower metal prices and high costs has forced the largest mining companies such as Barrick Gold Corp. to suspend projects and sell expensive mines in order to survive.

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Alert systems notify workers of underground danger – by Lindsay Kelly (Northern Ontario Business – October 15, 2013)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

Sudbury’s Hard-Line is introducing a new product to the mining industry that will increase safety for workers, with the aim of preventing injury or death on the job.

The Prox Proximity Detection System, launched in August, is designed to alert workers when they get too close to a piece of heavy equipment while working underground.

“There have been incidents in the mining industry where these sorts of things happen because people become complacent with using a remote control,” said Max Gray, Hard-Line’s director of sales North America and global marketing. “They get too close to it, they make an error, and all of a sudden it’s too late for them to react. This system will warn them so they can react.”

Prox, which is integrated into Hard-Line’s Muckmaster Radio Remote Control System, detects when a remote operator enters a zone around the piece of machinery being operated. When a zone is breached, the system emits an audible and visual warning alert and can be programmed to slow or stop the machine automatically.

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Boart Longyear focused on weathering cyclic storm, building on lessons learnt – by Henry Lazenby (MiningWeekly.com – October 8, 2013)

 http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – The world’s largest drilling company, Boart Longyear, has positioned itself to weather the difficult markets and emerge a leaner, more efficient company that had taken to heart lessons learnt in its recent overleveraged past.

CEO Richard O’Brien said the company was now positioned to perform better with its significantly reduced cost footprint.

“The plan is to keep the costs permanently off the balance sheet, even in the event of a rebound in market conditions,” O’Brien, who joined Boart Longyear this year from gold mining giant Newmont Mining, told Mining Weekly Online in an interview on Monday.

He blamed over-enthusiastic outlook assumptions for the debt blowout and spending that left the company exposed to the recent downturn. The Utah-based and Australia-listed company had last month finalised issuing $300-million in senior secured notes to retire most of its $450-million in debt.

Despite the newly issued notes bearing a 10% coupon, the debt restructuring would give Boart at least some relief from debt covenants that had cast an uncertain shadow over its immediate future.

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NEWS RELEASE: ONE HUNDRED AGGREGATE DELEGATES TOUR RAIL-VEYOR® MATERIAL HANDLING SYSTEM

The Ontario Stone Sand & Gravel Association Members Learn the Benefits of Rail-Veyor® for the Aggregate Industry.

Sudbury, ON, Canada – Oct 7, 2013 One hundred members of the Ontario Stone Sand & Gravel Association toured the Rail-Veyor® facility in Sudbury just recently. Rail-Veyor Technologies Global Inc. manufactures and installs RailVeyor®, a bulk material handling system for surface and underground applications for the mining and aggregate industries.

The Ontario Stone Sand & Gravel Association educates its members on the proven technologies that will help their companies maximize productivity, profitability and safety. “We’re pleased to have included the Rail-Veyor® bulk material handling system on our OSSGA Operations Tour. The technology and engineering behind the system is impressive. Based on the number of questions and time spent seeing it in action, it’s clear that our aggregate members had a lot of interest in the system and the productivity it offers to operations,” comments Dan Muys, Director of Communications and Marketing, Ontario Stone, Sand & Gravel Association.

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Sandvik’s Customer Day – From start to Finnish – by Cole Latimer (Mining Australia – September 24, 2013)

http://www.miningaustralia.com.au/home

It’s not everyday that a new piece of equipment is launched. But when a company does, it’s unusual, even in these times of a downturn, not to do so without some fanfare. So when a company launches not one, but multiple pieces of equipment it has to make a serious statement.

This is exactly what Sandvik did following the release of not only two new drill rigs, but the world’s largest drifter, new underground drilling equipment, multiple new drilling threads and bits, and the latest developments in its automated and tele-remote mining systems.

It brought together more than 300 people from ten countries to demonstrate its new equipment in the flesh during its massive customer day. The group gathered at its Tampere facility in Finland to see the latest developments.

The facility itself was also on show, asthe visitors tramped across the site which Sandvik claims is the largest mining machinery manufacturing facility in Europe. As we crossed through the gates a little piece of Australiana welcomed the groups, a ‘beware of kangaroos’ sign, greeting visitors. Quickly the group was ushered in, where we were given a first hand demonstration of its AutoMine system.

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How important is innovation in the Sudbury cluster? – by Dick DeStefano (Sudbury Mining Solutions Journal – August 2013)

Dick DeStefano is the Executive Director of Sudbury Area Mining Supply and Service Association (SAMSSA).destefan@isys.ca  This column was originally published in the August 2013 issue of Sudbury Mining Solutions Journal.

Often underestimated by many small and medium sized mining companies, innovation is one of the most important engines of growth. The Sudbury mining and supply cluster members have not fully embraced the value proposition that Michael Porter has clearly described as essential for success.

I have become a disciple of Porter’s business model and have diligently looked for the appropriate ingredients including leaders to grow our important mining supply and service cluster in Northern Ontario during the past 10 years.

“Michael Porter claims that clusters have the potential to affect competition in three ways: by increasing the productivity of the companies in the cluster, by driving innovation in the field, and by stimulating new businesses.

According to Porter, in the modern global economy, comparative advantage—how certain locations have special endowments (i.e., harbour, cheap labour) to overcome heavy input costs—is less relevant. Now, competitive advantage—how companies make productive use of inputs, requiring continual innovation—is more important.”

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UPDATE 2-Atlas Copco to shed more jobs as mining slump deepens – Niklas Pollard and Helena Soderpalm (Reuters U.K. – July 18, 2013)

http://uk.reuters.com/

STOCKHOLM, July 18 (Reuters) – Engineering group Atlas Copco announced more job losses on Thursday as spending cuts across the mining industry hit demand for its trademark drill rigs and loaders and raised worries the sector’s downturn may have further to run.

Robust activity in services and industrial equipment stemmed a fall in group profit and orders but the company forecast that demand for mining gear would slip further in the near term.

Mining is suffering a hangover from years of booming expansion and has slashed capital spending as softer prices for commodities such as coal, copper and gold have raise doubts about future investment returns.

The likes of BHP Billiton and Rio Tinto have cut billions of dollars from outlays. For Atlas Copco and its cross-town rival Sandvik, which together supply more than half the global market for underground mining gear, this has brought a sharp drop-off in equipment orders though a thriving services business has cushioned the blows.

Unlike Sandvik, which is due to report on Friday, Atlas’s single biggest mining exposure – around one third – is to gold whose price has slid more than 20 percent since year-end.

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Mining supply chain links up – by Maureen Arges Nadin (Thunder Bay Chronicle-Journal – June 24, 2013)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

Maureen Arges Nadin is a Thunder Bay-based freelance writer.

The recent buzz of interest in the flourishing Ontario mining sector has left many people asking, “Where are the jobs?”
We tend to derive our information from what we see directly in front of us, and most mines are far away or, in many cases, remote. Job-seekers wanting to remain closer to home are left wondering if there are options for those who don’t want to work in a traditional mine setting.

There is a larger picture that might not be immediately evident to observers outside of the industry. It is the mining service and supply chain.

Jobs in mining have a multiplying effect, and although the numbers vary slightly according to the area, it is a generally accepted equation that for every direct job in mining extraction, there are two to four jobs in mining supply. The recently released Mining Readiness Strategy defines the supply chain as “spinoff activities that cycle through the entire economy through the provision of goods and services to the mining sector.”

In Thunder Bay and region, there is a lot more going on in the mining industry than meets the eye.

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Mining equipment makers rise to efficiency challenge – by Maria Sheahan and Niklas Pollard (Reuters U.S. – June 20, 2013)

http://www.reuters.com/

FRANKFURT/STOCKHOLM – (Reuters) – Mining equipment manufacturers are making improvements to machinery that they hope will deliver productivity gains for customers and counter falling orders.

Under pressure from investors for higher returns, miners want to get the most out of every shovel, grinder and truck to help maintain margins which are being squeezed by high labour and energy costs and cooling commodity prices.

At an industry dinner this month, the new boss of the world’s largest miner, BHP Billiton, compared the sector’s search for efficiency to that of motor racing teams.

Thanks to tiny changes, he said, the Formula One pitstop – the time when cars are stationary for tyres to be changed – has gone from just under 4 seconds in 2010 to just over 2 seconds this year. “If we look at our industry, the prize is significant,” BHP Chief Executive Andrew Mackenzie told his audience.

“For us, every 1 per cent improvement in productivity translates to a $170 million saving.” Half of BHP’s operating costs are labour and contractors.

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