Tag Archives: ASI Mining

Epiroc M&A likely to continue, Per Lindberg says

The President and CEO of Epiroc, Per Lindberg, says the mining equipment maker is likely to continue making acquisitions as it strives for long-term growth over the latest business cycle.

In the company’s first full year of operation, Epiroc has, among other transactions, acquired a minority stake in mining autonomy major ASI Mining, agreed to buy rock tools manufacturer Fordia, and purchased Sautec.

Lindberg said in the company’s December quarter results that Epiroc is targeting to grow at least 8% per year on average over a business cycle.

“While we grew well beyond that in Q4 and in 2018, we believe we continuously need to make acquisitions to secure long-term growth as well as access to new technologies, markets and geographies,” he said.

On the recent Fordia, New Concept Mining and Sautec buys, Lindberg said Epiroc expected strengthened positions in exploration, rock reinforcement and service, and an additional SEK 1.2 billion ($132 million) in annual revenues.

In the December quarter, Epiroc said its orders received increased 17% to SEK9.47 billion, revenue jumped up 25% to SEK10.56 billion and its operating profit went from SEK1.53 billion to SEK2.16 billion, including costs related to the split from Atlas Copco and change in provision for long-term incentive programmes of net SEK8 million.

Lindberg reflected on this quarterly performance, saying: “We have been able to ramp up our capacity in manufacturing and service to support our customers, and revenues reached a record SEK10.56 billion, up 19% organically.”

He added: “In our first year as Epiroc we achieved strong growth in both top and bottom line, in parallel to a successful split and introduction of the new company. Reported orders and revenues increased 16% and 22%, respectively. Our operating profit increased by 25% and the operating margin, adjusted for split costs and provision for long-term incentive programmes, increased from 19.4% to 20.3%.”

Lindberg said customer demand for Epiroc’s equipment, services and tools remained at a good level during the quarter. “In mining we continue to see that the majority of the equipment orders are for expansion, including also some orders for greenfield projects,” he said, while aftermarket business was supported by high activity among its customers, leading to strong growth.

During the most recent quarter, Epiroc launched the second generation of its battery-operated equipment at an event in Örebro, Sweden.

Lindberg said the event created strong interest from Epiroc’s customers and orders have already started to come in.

In terms of the future technology transition in mining, in general, Lindberg said: “Our customers are ready for a major technology shift towards more automation, digitalisation and battery power.

“While the complete transition will take time, it is exciting to already now see the positive customer reactions.”

Looking into 2019, Lindberg said: “We will continue to focus on improving our customer offerings, our efficiency, agility and resilience. These are, and will continue to be, the strengths of Epiroc.”

Epiroc deal to make ASI Mining a better company, Larsen says

Epiroc’s investment in ASI Mining has been a big talking point over the past few months, with many observers keen to know how the two companies will interact going forward. IM Editor Dan Gleeson put some questions to Drew Larsen, Director, Business Development, ASI Mining, to find out what effect the investment will have on the US-based company.

IM: What does ASI get out of the Epiroc deal?

DL: It’s fair to say ASI has been looking for an investment partner for some time. There has been plenty of offers out there, but we have tried to be selective in finding an investment partner where there are lots of synergies and strategic alignment.

We felt Epiroc was not only a good equity partner, but an excellent strategic fit as well. What we get – in addition to the investment – is a lot of alignment with our OEM-agnostic approach and independence, which Epiroc is preserving. But, primarily, we get access to Epiroc’s global footprint from a service and support aspect; we’re able to support the needs of any customer around the world as Epiroc has customer centres in almost any area where there is active mining. Then, we get access to some of their best practices and know-how, which we will be able to leverage as appropriate.

We’re also looking at having tighter integration of some of their autonomous solutions with our Mobius solution.

IM: How will you continue to differentiate your autonomous solutions from others in the market?

DL: As competition increases, we have to compete on the merits of our system, capabilities and ability to provide service and support and attend to all the needs of our customers.
Regardless of our competition, our play is always to become the best provider in the space.

Epiroc is a great company, is very well managed, and has a great business model, vision and strategy. As we leverage some of their capabilities and work together in some of these areas, it will make us a better company for sure.

We would hope that our solutions are a better fit with the interests of our mining customers. There are several advantages – flexibility in terms of vehicle types, leveraging existing investments the sites have made and an ability to work on a more customised basis with our customers. We will continue to seek solutions that are predicated on customer needs. Because of our independence, it gives us some unique advantages to be able to play to those customer needs compared with some of our competitors.

IM: Automation seems to be getting a mention in the mining space every other day; how receptive are you finding companies to automation at the moment?

DL: My sense is that we are in a third wave, if you will. We had a first wave with some of the early adopters, then a second wave with adopters in Western Australia and some of the key Tier 1 mining companies. This third wave is pushing down into more of the mid-tier and junior miner space, which is showing a genuine appetite for leveraging some of the benefits of autonomous vehicles.

We definitely see more of a general acceptance to automation. I think there has been a notion that these systems are really expensive and difficult to implement, hence something only the Tier 1 mining companies have access to. Our message is we are trying to make this accessible to not just the Tier 1s but small miners too. As that awareness is gaining, we are seeing an awakening and acceptance that, a) automation would benefit their operations and, b) it is more accessible to them than they might think.

There are some sites out there dealing with labour or cost constraints. Where some projects might be marginal under traditional mining models, as they re-look at them through an autonomous capability, they may actually be able to justify the investment. We see some of that happening where folks are re-evaluating the viability of projects.

It’s not just cost reduction for existing operations; it is also looking to new opportunities through the lens of autonomy to make a marginal project more attractive.

IM: Anything else to add?

DL: I’m sure there is some curiosity around the market (in regards to the Epiroc deal) and what it means for our business. We’ve received a lot of feedback from customers saying this is a real smart move, and it will certainly complement and help the business. We talk about the fact that it will enable us to grow faster and part of that is by having access to an established global footprint and resources across the globe.

What we did not want to happen was to take on an investment from an OEM that simply gobbles our technology up and incorporates it into their own solution…Epiroc made it clear from the outset that it was not their intent. They valued our business model and wanted to help facilitate it. That was a real key consideration for us.

IM also heard Helena Hedblom, Epiroc’s Senior Executive Vice President Mining and Infrastructure, talk about the deal last month. You can read what she said here.