Industry News: Bigger Shovels Coming for Mining
October 11, 2012 Leave a comment
From time to time we will be using this space to share interesting industry news we come across. As a follow-up to MINExpo, check out excerpts below from the Wall Street Journal article that ran in the weekend edition (September 29-30, 2012):
Supersizing Mine Shovels
Caterpillar, Joy Global Building Ever-Larger Scoops to Fill Giant Dump Trucks
By: James R. Hagerty & John W. Miller
LAS VEGAS—Budgets at mining companies may be shrinking as demand for commodities cools, but their suppliers keep touting bigger and pricier equipment.
A Joy Global shovel with a capacity of about 120 tons loads a dump truck with copper ore at a mine in Utah.
At the MINExpo International trade show, Caterpillar Inc. boasted of new mining shovels able to hoist 120 short tons of ore, equivalent of about 50 pickup trucks. Joy Global Inc. one-upped Caterpillar the next day by promising a 135-ton shovel, expected to cost about $40 million.
The idea: let mining companies more quickly fill their biggest trucks—behemoths about the size of two-story houses. Joy’s shovel would do the job with just three scoops of material instead of four needed with today’s largest shovels. As trucks get bigger, shovels need to get bigger too, said Mike Sutherlin, chief executive officer of the Milwaukee-based company.
“Our [new] shovel will be good till they build a bigger truck,” Mr. Sutherlin said. Mining companies need big equipment especially when operating big surface mines. Rio Tinto averages some 700,000 tons of iron ore production a day in the Pilbara region in Western Australia, including over 100,000 tons a day at a single mine, Yandicoogina.
In the short term, miners may prefer to pinch pennies because profits are being squeezed by sluggish demand, weaker prices for some commodities and rising costs. Capital spending by mining companies is likely to fall between 5% and 10% next year if commodity prices stay near current levels, Mr. Sutherlin said. But he and others insist longer-term demand for mining equipment is strong because global population growth implies more need for roads, schools, airports and other infrastructure.
Mining executives say bigger shovels may be more efficient but Joy and Caterpillar must demonstrate that the new tools will work well enough to justify their added cost. One concern: If miners rely on fewer and larger pieces of equipment, the breakdown of one machine will be more disruptive.
Caterpillar and Joy are the biggest makers of the largest types of mining shovels, used in surface mining of coal, copper, gold and other commodities.
Joy’s new 135-ton electric-powered shovel, expected to be available about a year from now, is 22 meters (72 feet) tall. At present, Joy’s biggest shovel can lift 120 tons and costs about $30 million, or $10 million less than the new one. Caterpillar already has an electric shovel that can lift 120 tons and is promising a hydraulic model with that capacity.
Meanwhile, trucks may get bigger, too. The biggest ones in widespread use today can hold 400 tons of material. But BelAZ, a state-owned truck maker based in Belarus, has promised it would have a prototype for the world’s largest mining truck, able to haul nearly 500 tons, by next year.