May 07, 2012
Mining truck, tyre supply to reach balance in 2015 onwardsBack
Caterpillar|Education|Systems|China|India|United States|USD|Equipment|Mining|Systems|Doug Oberhelman
© Reuse this
“We have been playing catch-up with the mining industry for a decade or more,” he adds.
Current lead times on securing a mining truck could be anything from 18 months upwards.
A disinvestment in the mining supply business in the 1990s was followed by an exploding mining market from 2002 onwards as China and India opened up their markets, leaving tyre and capital equipment suppliers short of production capacity.
“We are pouring cash into our mining business,” says Oberhelman. “In 2009 and 2010 we doubled our capital expenditure every year. We have doubled truck production already and we will double it again in the next few years.
“We are spending $4-billion in capex this year and the biggest chunk of this will be for mining – and this is on top of acquisitions.”
Oberhelman says customers have already placed truck orders with Caterpillar for mines opening in 2014, in an attempt to circumvent long lead times.
He notes that specialised mining tyre supply is very much in the same boat as mining truck availability, with only the recent recession providing somewhat “of a breather”.
However, Oberhelman says the major tyre manufacturers have indicated that they are investing heavily in the production of 32 inch tyres and upwards and that the supply-demand situation should be in balance by 2015 onwards.
However, he warns that a rapid increase in mining truck demand could again upset tyre and truck supply-demand dynamics.
‘TECHNICAL TRAINING FAILING US’
“Technical training at schools is failing us [Caterpillar],” says Oberhelman.
“We reject 60% of the applicants at our production facilities.”
Apart from “highly stressed education systems globally”, Oberhelman also attributes this situation to the death of “tinkering” as kids used to grow up with farm equipment, but are now raised on a diet of “joysticks”.
He notes that the US capital equipment manufacturer has “an insatiable demand for technicians.”
“The only, but only competitive advantage a country has is its education,” he emphasises.
Oberhelman says Caterpillar would need to hire 20 000 people up to 2020, with its 12 000-strong Chinese employee contingent expected to more than triple over the next ten years.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Mining News
Gold miner Harmony Gold has closed its Kusasalethu mine for two weeks, as it takes a stance against the scourge of illegal miners after a fire – the third this month – threatened the safety and health of mineworkers. The fire, believed to have been started on...
Gold recovery company Goldplat, the South African operations of which generated an operating profit in the three months to September 30, is taking steps to diversify into platinum group metal (PGM) recovery. The London-AIM-listed company, which serves companies...
Coal junior Wescoal has secured R200-million in funding from Investec Bank to be used primarily for the commissioning of its Elandspruit colliery. The financing facility includes a R180-million five-year term loan and a R20-million five-year working capital facility.
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
This Week's Magazine
In the next 20 years, it was expected that, in Africa, more people would live in cities and towns than in rural areas, United Nations Habitat executive director Dr Aisa Kirabo Kacyira said at the Human Settlements Indaba that took place earlier this month in...
Tough-talking Human Settlements Minister Lindiwe Sisulu has committed government to building 1.5-million low-cost houses over the next five years, telling the Human Settlements Indaba in Johannesburg on Wednesday that the State would achieve this target through the...
Over the past 20 years there has been persistent concern about deindustrialisation in South Africa, as well as the fact that locally produced manufactured products have been increasingly displaced by imports.
Financial agreement for Ghanian independent power producer (IPP) Cenpower Generation Company’s $900-million, 350 MW combined-cycle gas-turbine power plant was finalised earlier this month, paving the way for the project’s construction to begin before 2015 in Tema,...
The revenue implications for South Africa of ‘base erosion and profit shifting’ by corporate taxpayers are firmly in the crosshairs of the Davis Tax Committee (DTC) and Judge Dennis Davis hinted last week that recommendations were being considered to “detect and...