Tag Archives: Finning

Finning captures large Cat equipment order from Codelco’s Andina, Chuquicamata mines

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.”

 

Finning flags Cat truck fleet renewal, rebuild and autonomy potential in Western Canada

Finning is sensing the potential for future fleet renewals, rebuilds and autonomy conversions from its Caterpillar off-highway truck customers in Western Canada as the average age of its Cat truck population in this region increases.

Commenting on this during its September quarter results – which saw revenue and gross profit drop 21% and 15%, respectively – the company was able to provide some positive forecasts for its business in Canada and Chile.

Finning said it was gearing up for higher production out of Canada’s oil sands sector in 2021, explaining output had recovered from the lows seen during the onset of COVID-19 and the company was expecting an increase next year.

“Oil sands producers’ truck fleet utilisation returned to pre-COVID-19 levels at the end of September, and contractor fleets have begun to increase utilisation and should ramp up further in Q4 (December quarter) 2020 and into 2021,” the company said. “We expect product support activity in the oil sands to improve in Q4 2020 and into 2021, driven by catch up on major rebuild and maintenance work and an increase in oil production and non-production mining activities.”

Finning said while restricted capital spending and ongoing cost containment were impacting demand for new mining equipment, the company expected mining product support activity to improve as customers increase production output and resume full-scope maintenance activities.

Finning’s mining customers in Western Canada operate around 620 large and ultra-class Caterpillar off-highway trucks, of which 6% are autonomous (mostly in the oil sands). The average age of this Caterpillar truck population in Western Canada is about 11 years.

As mentioned, this large and ageing fleet is expected to drive opportunities for future fleet renewals, rebuilds and autonomy conversions, as well as continued demand for product support, the company said.

It added: “We are also seeing a notable resumption in request for proposal activity from Canadian mining customers.”

In the Chile mining sector, meanwhile, Finning said COVID-19-related operating restrictions were easing, with customers beginning to catch up on component exchange and major maintenance work.

“We expect mining product support revenue to recover significantly as we exit 2020 and begin 2021,” it said.

Finning was optimistic about mining recovery in Chile in 2021, driven by a strengthened copper price and expected increase in copper production, it said.

Over 570 large and ultra-class Caterpillar off-highway trucks with an average age of 11 years are currently operating in Chile’s copper mines and will continue to drive demand for product support, it added.

“We are also encouraged by the resumption of Teck’s QB2 project – the first deployment of autonomous trucks in Chile – and have started to deliver equipment to QB2 in Q4 (December quarter) 2020,” Finning said.

Finning said it has also seen a notable increase in request for proposal activity from mining customers in Chile.