Sandvik recently announced a decision to initiate divestment of the project business Mining Systems. Mining Systems is a separate product area within Sandvik Mining and a supplier of design and engineering of material handling systems for the mining industry. In 2014 the Mining Systems operations, with 1,300 employees, had annual sales of SEK 6.3 billion representing 7% of Sandvik Group invoicing, and an operating loss was reported at a low single digit level.
“Divestment of Mining Systems will make Sandvik Mining more focused on its core operations, mining equipment and aftermarket offerings for both underground and surface mines, which Sandvik will continue to develop to ensure long term value creation”, says Mats Backman, CFO and acting President and CEO for Sandvik. The announcement comes only a few months after the company announced that Mining Systems had been awarded a major materials handling contract in South Africa, which included engineering, supply and installation of two bucketwheel stacker/reclaimers with capacity of up to 6,800 t/h and two shiploaders with capacity of up to 11,000 t/h for coal handling.
As from the third quarter 2015 and until closure of the divestment, Mining Systems operations will be reported as discontinued operations in the Sandvik Group financial statements. Mining Systems will thus be reported as a single amount below the result of continuing operations in the income statement. A nonrecurring charge of SEK 1 billion related to Mining Systems will impact the result for the third quarter 2015. This includes write-downs related to projects, other provisions for project related costs and impairment within Mining Systems.