- Processing Solutions
- Asset Management
- Blowers & Fans
- Dryers & Evaporators
- Filtration & Separation
- Fluid Flow
- Heat Exchangers
- Level Measurement
- Maintenance & Safety
- Material Handling
- Mixing & Blending
- Motors & Drives
- Oil Skimmers
- Piping & Tubing
- Packaging Equipment
- Powder & Bulk Solids
- Process Control
- Pumps & Seals
- Size Reduction
- Tanks & Vessels
- Valves & Actuators
- Tech Portals
- Buyer's Guide
- White Papers
The mining industry has it all. Its highly speculative endeavors require huge capital investment for technology-driven, remote-area operations that entail substantial safety and environmental concerns. The law and politics related to mining the earth’s commodities are extremely contentious. And demand can be cyclical.
Yet humans have been doing it since time immemorial. For 2012, industry capital expenditures were estimated at $136 billion. Compared to past performance, however, the present environment is challenging for many mining companies.
For example, said Oleg Korzhov, CEO of Mechel, the Russian mining and steel company, in a recent company quarterly earnings call with industry analysts, “Suffice to say that in 2013 the average coke and coal price dropped by 33% year-on-year.”
Nevertheless, analysts predict the global coal-fired power generation market will grow at a compounded annual growth rate of 3.8 percent over the period 2013-2018.
Supplier straight talk
U.S.-based mining equipment maker Caterpillar is often considered a barometer for the industry. According to Michael I. DeWallt, VP, Caterpillar strategic services division, speaking on a recent conference call, said, “The decline we’re seeing in the mining industry began in mid-2012 and it’s continued.”
Further, despite the prospects for a better year in the world economy, “and continued strong production at mines, new equipment orders haven’t improved,” said DeWalt. Transcripts of the company’s quarterly earnings calls are available at website, Seeking Alpha.
At maker of mining equipment Joy Global, in the latest quarter, orders for original equipment totaled $250 million, down 43 percent.
“While most major commodities remain over supplied and prices depressed,” said Edward L. Doheny, Joy Global president and CEO, “we are beginning to see some demand improvements. After trending below three percent in 2013, global economic growth is projected to exceed 3.5 percent this year, which should drive commodity growth.”
Speaking on a recent quarterly earnings call, Doheny notes something of what’s different about the current global economic recovery and commodity markets. “If it affects productivity such that they can drop their cost curve… or if it’s safety, those are projects they will put forward.”
In contrast, in the past, “when markets bounced back, commodity prices were so high that extra people were jumping in the market,” Doheny said.
Some of the industry’s biggest challenges are related to water use. Both mining industry and water industry suppliers want the business. For example, French water and environmental services company Veolia Environnement SA believes it will increase its “total sales value” to the mining industry to $2.1 billion by 2020.
Besides being highly dependent on water in general, many mines are being opened in areas where water is scarce, said the Veolia CEO, Antoine Frerot, in a recent press conference. He is confident water and wastewater treatment services in the mining industry will grow in response to stricter environmental rules requiring mining companies to engage in water conservation and treatment. Mineral recovery from wastewater can also be accomplished, Frerot pointed out.
The water company is shifting its focus to industrial clients, Frerot explained. The mining industry is the second-largest water-consuming industry, and Veolia aims to generate about half of its revenue from industrial clients over the next few years, up from the current third.
To conclude, water-related mining-industry issues are many, multi-various and include, for example, the fact that there are 6,000 abandoned mines in South Africa, largely flooded, with flows of untreated water into rivers widely suspected, according to Bloomberg Businessweek.