Caterpillar’s relationship with Codelco in Chile continues to strengthen with the OEM, through its Finning dealer, set to deliver mining support equipment and underground loaders to two of the copper miners’ operations.
The orders, revealed in Finning’s June quarter 2021 results, contributed to a building equipment backlog in mining and construction registered during the three-month period in South America.
New equipment sales were up 48% year-on-year in the June quarter in South America and up 14% from the March quarter of this year, driven by improved market activity, mostly in construction, Finning noted.
Finning’s backlog in South America included the Codelco orders.
First was a recently awarded order for Caterpillar support equipment from Codelco’s Andina mine, valued at C$40 million ($32 million), for delivery in the first half of 2022. In addition, the company plans to provide 27 Caterpillar R3000H underground loaders to Codelco’s Chuquicamata mine, with 10 of these machines included in its June quarter backlog.
The 20 t class R3000H was launched in 2012 and remains Cat’s largest model. It replaced the R2900 XTRA, providing added value for hard rock mine operators with a significant increase in truck loading capacity, being able to three pass load 60 t class trucks, and having enhanced digging and breakout performance, faster speeds on grade, a strengthened front frame, and an available Ventilation Reduction Package. Since then there have been a number of deployments of the LHD but there are only a few underground mines in the world with a potential requirement for large numbers of loaders of this class at one operation. One of these is Codelco’s new Chuquicamata Underground blockcave copper mine. This is one of the largest single large LHD orders ever made and will help the mine achieve its intended production rate of 140,000 t/d which is a rate on a par with sister operation and the world’s largest existing underground copper mine, El Teniente. Chuqui Underground includes four levels of production; a 7.5 km main access tunnel, five clean air injection ramps and two air extraction shafts. It will produce 366,000 t of fine copper and more than 18,000 t of fine molybdenum per year & extending Chuqui’s minelife to 2060.
Overall, Finning registered June quarter revenue of C$1.8 billion and net revenue of C$1.7 billion, up 30% and 28%, respectively, from a year earlier when COVID-19-related reductions in market activity hit.
All regions delivered a strong quarter, demonstrating operating leverage in a recovering market, Finning noted. June quarter EBIT as a percentage of net revenue was 9.3% in Canada, 9.8% in South America and 5.3% in the UK & Ireland, representing a step-up in profitability levels for all regions, the company said.
The company’s consolidated equipment backlog at June 30, 2021, increased to C$1.4 billion, from C$1.2 billion at March 31, 2021, with order intake in Canada and South America outpacing deliveries in the quarter, Finning said.
“We are pleased with our strong execution and results in the second (June) quarter,” Scott Thomson, President and CEO of Finning International, said. “With a reduced cost base and more efficient operations and supply chain, we are confident in our improved earnings capacity, which puts us firmly on track to achieve the mid-cycle targets we set out during our Investor Day in June.”
