Tag: Allan

first_imgFollowing the Caterpillar buyout of Bucyrus, there has been speculation in the mining equipment market for some time that some kind of additional consolidation is likely (or even necessary); particularly with regard to Komatsu – the clear number two in mining trucks and the leader in the largest hydraulic mining excavators such as its PC8000 model – potentially joining forces with Joy Global. This would add Joy’s significant underground equipment business but also the P&H rope shovel (and new IPCC) business to the Japanese mining equipment group’s range. However, in a recent report by Bloomberg based on an interview with the Komatsu CEO, Kunio Noji, it appears that no such move is on the cards at the moment.Somewhat strangely given Joy Global’s strong position in underground equipment, and especially coal/soft rock with continuous miners and longwalls, the report quotes Noji as stating that there are few synergies in such a deal to aid its apparently planned entry into the underground mining equipment market. Though it would seem time is of the essence, with the likes of GE picking up Industrea and Fairchild recently and the mining boom set to continue for the foreseeable future, albeit with probably declining growth rates, largely due to China’s growth easing off.“While we often consider mergers and acquisitions, it wouldn’t be beneficial for us to do so without synergies,” Noji is quoted as saying in an interview in Tokyo, where the company is based. Komatsu stated it aims to offer innovative products to beat competition in a new business and has apparently yet to identify a target that offers value-added products and technology; saying that it will probably seek to enter the business through in-house development. Automation was also mentioned as a priority, and of course Komatsu has achieved early success with its surface truck automation programme in the Pilbara. However, the time and cost associated with developing its own underground equipment business would seem very prohibitive. Others have tried and failed.There is still certainly room for consolidation whether it be between Komatsu and Joy Global, or between some of the other main players, from Sandvik and Atlas Copco to Hitachi, Volvo and Liebherr. It is also worth remembering that it is not always the most obvious tie-up that actually goes ahead. With construction and quarrying powerhouses like Hyundai, Daewoo, Sany, LiuGong and others around, all of whom are pressing ahead with larger and more mining focused equipment, anything could happen in the next year to 18 months. MINExpo in September will no doubt prove a fruitful arena for discussion.last_img read more

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