Those involved in the mining equipment industry in Germany are optimistic about future demand for their products, with only state-of-the-art technology able to provide the raw materials needed for climate protection and digitisation, the VDMA Mining Association reports.
This is despite expectations of a decline in sales of for 2020, the association said.
This industry importance was also emphasised by the Chairman of the VDMA Mining Association, Dr Michael Schulte Strathaus, during the association’s annual press conference at the Zeche Zollverein in Essen, Germany, earlier this month.
Due to the pandemic, predictions for 2021 are hard to make, but Schulte Strathaus said he was sure incoming orders and sales will develop positively in the future.
“We ensure that raw materials can be mined and processed,” he said of the equipment makers within the association. “Mining equipment is becoming increasingly environmentally friendly and is making its contribution to climate targets, for example through alternative drives and lower energy consumption in mines.”
Production and sales developed well in 2018 and 2019 for the mining companies from Germany, the VDMA said. Yet, contrary to expectations, new business and incoming orders fell sharply at the end of 2019.
While the industry was still expecting a subdued development with stagnating sales at best, COVID-19 put additional pressure on these companies.
Over 2020, companies managed to close the interrupted supply chains again and to organise COVID-19-compliant production. They largely switched communication with overseas customers to web-based procedures. By the end of the summer, the industry was sending out very different signals: from virtually unchanged sales plans and expectations, to a drop in sales of 30% or more. Overall, the industry expects a decline in sales of 10-15% in 2020 to €4-4.5 billion ($4.8-5.4 billion).
The EU countries, the US, Russia, and China remain among the largest export markets for German mining manufacturers. Australia demand surprised this year, reaching second place among the individual markets, ahead of China and Russia. With an export share of 96%, manufacturers in Germany are dependent on foreign business.
In the EU, mining production has remained stable over the last 20 years. In the summer, the EU Commission announced it wanted to secure Europe’s supply of critical raw materials. To this end, the procurement of raw materials in the EU is to be strengthened, the VDMA said.
In the US, Schulte Strathaus believes the mining industry is on the brink of upheaval.
“With Joe Biden, the country will commit itself to climate neutrality, and large parts of the announced funds of around $2,000 billion will be channelled into the development of clean energy technologies,” he said. “This creates opportunities for our mining equipment manufacturers in Germany. However, they must make more effort to open up new sales areas or expand existing ones.”
Following a very successful 2019 with exports of around €97 million, deliveries to Australia fell to €68.8 million in the first eight months of 2020. Schulte Strathaus was confident Australia customers would again be more interested in mining technology from Germany from 2021 onwards, as the reluctance to establish new supplier relationships due to the pandemic eases.
Russia is currently a very difficult market due to sanctions, political disagreements, and the weak Rouble, the VDMA said. Travel restrictions and the uncertainty that deliveries from Germany could be stopped at any time make business relations risky for companies in Russia, it added.
In China, coal mining was way ahead of the wider Chinese mining industry. While the country is recovering from COVID-19, the mining sector generated sales of around €309 billion and a profit of around €30 billion in the first eight months of the current year. Manufacturers from Germany were unable to benefit from this, the VDMA said. By August, exports had only reached €67.7 million, a drop of 45%. Schulte Strathaus, nevertheless, sees good chances for positive German equipment sales development, with China banking on digitisation and unmanned operation of mines.
In addition to all the positives that come with adopting new technology, social benefits are increasingly becoming the focus for manufacturers of mining machinery, according to the VDMA.
“With our machines, we guarantee a climate friendly and secure supply of high-tech raw materials because, without them, there can be no energy transition,” Schulte Strathaus said.