Tag Archives: mining equipment

Epiroc in Q2: Australia service business, automation/digitalisation projects stay strong

Automation, Communications in mining, IoT, Mining equipment, Mining finance, Mining services, Mining software, Power supply for mines, Sustainable mining, , , , , , , , ,

There were some bright spots in Epiroc’s latest COVID-19 affected quarterly results that bode well for those companies serving the mining industry.

The headline figures were a 23% year-on-year drop in orders received to SEK8.105 billion ($913 million), a 20% fall in revenue to SEK8.458 billion, and a 37% cut in operating profit to SEK1.418 billion.

As President and CEO, Helena Hedblom, explained in the quarterly results: “The COVID-19 pandemic impacted us significantly in the quarter, yet we managed to quickly adapt our way of working, lower our costs, show resilience in our profitability, and deliver a strong cash flow.”

This cash flow – SEK1,963 million – was actually 30% higher than a year ago, which has no doubt been helped by its rationalisation and cost cutting.

Epiroc is a slimmer organisation than it was a year ago. As of June 30, 2020, 13,967 employees and 1,145 consultants/external workforce employees were on its books. This is 702 people lighter than it was at the same time in 2019.

On June 2, Epiroc announced it was giving notice of termination to 425 employees in Sweden in response to lower global demand from mining and infrastructure companies amid the pandemic and to position the company better for the future.

This followed an announcement in April that it was to consolidate the manufacturing of exploration drilling tools in Canada, gradually moving its base from North Bay to Montreal and Sweden over the course of 2020, with 65 employees affected.

Outside of Europe and North America, there were some positives for the company and the wider mining industry to consider.

For the company’s service business, which makes up the majority of its revenues, the orders received decreased 3% organically (year-on-year) to SEK3.719 million. This is a mild contraction compared with the 29% year-on-year organic drop it experienced for equipment orders.

This shows that while companies are not, on the whole, buying new equipment, they are still spending the money to keep their fleets going.

Compared with the previous year, service orders in local currency decreased in all regions, except Asia/Australia, another brightspot.

Helena Hedblom expanded on this trend when speaking to IM: “In general, the activity levels in mining in Australia have kept up very strong in the quarter. That is the only region where there has not been a big drop in the activity level; if we look at the other regions in the world, there are only a few countries with the same development, maybe Chile and Brazil as I said on the call (with analysts and investors).

“Mining in Australia has held up better than the rest of the world.”

With its main workshop and distribution centre for parts in Perth, Western Australia, servicing major gold and iron ore mines in the state, and various other facilities across the country, the company’s deliveries have also not been affected by the border issues related to COVID-19, Hedblom said.

Australia was arguably quickest out of all mining regions to adapt to COVID-19-related operational changes and its government has prioritised keeping the sector open throughout the entire pandemic.

With commodity prices such as gold and copper relatively strong and more governments in various countries now realising mining’s positive contribution, one would expect other places to follow suit in the upcoming months and quarters.

Epiroc’s quarterly results also provided some evidence of COVID-19 potentially speeding up the digitalisation and automation trend.

“In the quarter, we received multiple orders for automation solutions for both underground and surface applications, including a large order in Chile of equipment with 6th Sense solutions for automation, connectivity and information management,” Hedblom said in the results statement.

The Chile order referenced was for Codelco’s Chuquicamata underground mine, which included multiple units of Scooptram ST1030 and ST18 loaders, the Boomer S2 face drilling rig, the Boltec M bolting machine, and the Minetruck MT65.

On top of being equipped with 6th Sense, these machines come with Epiroc’s Rig Control System, RCS, which makes the equipment ready for automation and remote control, and Epiroc’s Certiq system, which allows for intelligent monitoring of machine performance and productivity in real time.

Speaking to IM, Hedblom said: “I think the pandemic has clearly increased the interest [in automation and digitalisation]. The mining companies, of course, are trying to minimise the number of people on site, and here digitisation, tele-remote, as well as automation, can offer support for that work. We are seeing more and more interest in that.”

She added: “We have been able to continue to deploy our automation projects because we have invested in automation centres regionally out in the different markets, on most continents. That has supported us to continue with this journey even though we can’t travel from Sweden to other countries at the moment.”

Summing up the results and the company’s broader offering during these pandemic-hit times, Hedblom concluded: “We have been focusing on lowering our cost in light of the pandemic and, as we have talked about, investing more in innovation than we have ever done. That is our commitment to the industry; to continue to come up with new products with better solutions from a productivity, safety and sustainability standpoint.”

Outotec adds HIGmill to list of modular mining solutions

Comminution of minerals, Mineral processing, Mining equipment, Mining services, Sustainable mining, , , , , , ,

Outotec is modularising its high intensity grinding mill solution as it looks to improve safety, speed up return on investment and minimise plant footprints when it comes to grinding mill installations.

The Outotec HIGmill plant (HMP) is a standalone, modular solution for fine grinding that addresses these conflicting requirements, the company says.

Consisting of a vertical HIGmill unit and pre-engineered auxiliary equipment modules to reduce engineering, delivery, construction, and commissioning time and cost, it still provides a safe solution with the flexibility to meet various process, layout, and regulatory requirements, according to the company.

These modules are preassembled in the factory to reduce safety risks and maintain the highest possible quality while also reducing on-site construction time and cost.

“The modules and vertical HIGmill can be arranged in a compact footprint to suit the specific site layout, minimising layout and engineering work,” Outotec said.

The HMP includes an Outotec PSI® 500i particle size analyser for continuous online process monitoring and feedback, while the HIGmill provides process flexibility by adjusting the speed to match the energy input for the required product particle size. This, the company says, minimises the risk of operational challenges and reduced recoveries resulting from variable process conditions.

Bjorn Nielsen, Director – Product Management, Grinding at Outotec, talking about the benefits of using the HIGmill®, told IM earlier this year: “The Outotec HIGmill has several key advantages over other fine and ultra-fine grinding technologies. The vertical arrangement means that gravity helps to compress the media bed, ensuring high contact loads between media symmetrical energy transfer throughout the charge. As a result, the HIGmill has a very broad operating range – energy efficiency is very similar for a range of media charge levels and operating speeds.

“This operating flexibility lets us deal with variations in feed particle size while maintaining efficient operation – there is no point having the most efficient equipment in the world if it cannot be continuously operated at its most efficient.”

Riddhika Jain, Product Manager at Outotec, said the HMP combines Outotec’s leading fine grinding technology with faster installation and a compact footprint while maintaining safety standards.

“This standalone modular solution comes in easily installable pre-assembled sections to speed up returns on investment,” Jain added.

Like Outotec’s other modular solutions – such as the VSF®X modular concept and Modular Paste Backfill Plant – the HMP helps optimise delivery lead time and site construction planning. The delivery scope typically consists of a HIGmill, cyclone, hoppers, pumps, media crane, steel modules, switch room, pipes, valves, instruments, and control system.

Strata Worldwide takes advantage of Geoverse ‘5G-ready’ solution

Automation, Communications in mining, IoT, Mining equipment, Mining services, Mining software, , , , , , , , , , ,

Geoverse, a leading provider of private LTE/5G solutions and the largest neutral host carrier in the US, has announced support for licensed wireless spectrum on its existing GeoCore™ network service platform.

This solution combines low-band licensed spectrum with Citizens Broadband Radio Service (CBRS) to form a high performance and reliable private LTE/5G network that enables the adoption of Industry 4.0 for mining, oil and gas exploration, utilities, and other industries, it said.

“It merges the power of CBRS with the performance of licensed 600 MHz and 700 MHz spectrum to guarantee a reliable network where it is needed, supporting voice calling, high-speed broadband and critical low-latency IoT,” the company added.

One company taking advantage of GeoCore and the combined spectrum offering is mining-focused Strata Worldwide.

Tom Michaud, CTO of Strata Worldwide, said: “In such extreme environments, the performance and reach of the low-band spectrum can make it a preferred option for select applications. And, it complements CBRS quite well so collectively they can serve a variety of use cases found across our remote locations, providing a high-performance service connecting users, devices and even delivering highly reliable service for our automated equipment.”

Geoverse offers an option to use its unique GeoCore service platform to deploy the licensed 600 MHz and 700 MHz spectrum from their solutions across 14 western states in the US. “The best part is that since the network uses licensed spectrum it belongs exclusively to the enterprise it serves,” the company explained.

It added: “Industries such as mining, oil and gas exploration, energy, and more have turned to a variety of wireless solutions to try to keep their daily operations flowing smoothly. However, this patchwork of networks can be costly and difficult to manage, while still falling short of the various connectivity requirements. In the era of automation and the digital workplace, inadequate coverage and inconsistent performance can disrupt operations to reduce productivity and impact the bottom line.”

Rod Nelson, CEO and Co-Founder of Geoverse, said private LTE networks meet the design, operational, and performance requirements that heavy industry needs, while giving them authority over coverage, capacity and function.

“By combining the coverage and exclusive use of licensed spectrum with the capacity depth provided by CBRS, we create one private LTE/5G networking solution to satisfy many needs,” he said.

CBRS enables enterprises to deploy and maintain their own networks. Now, with the addition of licensed spectrum, these same networks can do even more, all from a single, scalable, and secure network, the company said.

“The Geoverse 5G-ready solution provides a unique opportunity for enterprises to digitally transform their business,” it added.

Metso adds crushing & screening flexibility to the process flowsheet with My Plant Planner

Bulk handling, Comminution of minerals, IoT, Metallurgy, Mineral processing, Mining equipment, Mining services, Mining software, , , , , , , , , , , , , , , ,

Metso is looking to increase access to and improve the visualisation of mining process flowsheets with a new tool that could ultimately see more of its equipment end up at mine sites.

My Plant Planner offers engineering customers and mining end users the ability to model a flowsheet after inputting certain key parameters of their orebodies. They can then also visualise this plant layout in a platform that is free to use.

Metso, along with other OEMs, has provided visualisation tools to the industry for many years.

The company’s Bruno simulation software has over 7,000 users and has been helping customers select the right equipment for their mines since 1994. This software includes all the necessary Metso equipment, such as feeders, crushers and screens, and shows outputs for different end products, providing users with the data they need to make informed decisions on the right equipment.

My Plant Planner utilises this simulation expertise, but does so at a much earlier stage of the equipment selection process.

With the tool, customers can pick and choose different types of crushers, screens and conveyors to get the perfect balance for the circuit and identify bottlenecks to understand where extra capacity is needed, according to Metso.

Important factors, such as capacity, load, and power draw, are updated in real time as the circuit is designed and the parameters updated. At any point, it is possible to download a report that gathers together all the details about the plant being designed. It includes details on the chosen crushers, screens, conveyors and their parameters, including power consumption.

“We decided to develop this tool as we were seeing different types of requirements from our customers and EPCMs (engineering procurement and construction management) at the time around prefeasibility studies and we wanted to be more reactive to this,” Guillaume Lambert, Vice President of Metso’s Crushing Systems business line, explained to IM.

Prior to using such a tool, these EPCM firms were developing flowsheets for economic studies – the type of documents investors use to gauge the potential profitability of a mine development – over a matter of months or years in tandem with OEMs, before moving onto obtaining quotes based on their mining customers’ budgets.

As time has gone on, these firms have been asked by their mining customers to factor in more requirements into these studies. One may require a reduced plant footprint due to the proximity of indigenous communities; another may request that energy consumption is reduced in line with existing available power infrastructure in the region.

The requests vary depending on the size of company, the location of the project, the commodity and many other elements.

This is where the three-dimensional aspect of My Plant Planner is very important, according to Lambert, providing customers with not only a visualisation of the flowsheet, but also a gauge of the physical constraints that cannot be represented in 2D form.

This means companies assessing brownfield assessments can factor in height and width restrictions of existing infrastructure against capital expenditure requirements.

The turnaround time for the type of analysis being carried out by My Plant Planner is also a key selling point, allowing companies to generate results in a matter of hours, as opposed to waiting two to three weeks for a flowsheet assessment.

This speed could allow customers to explore multiple processing flowsheets in a simplified form as part of their due diligence process – for example weighing up a three stage conventional crushing and screening flowsheet against a HPGR circuit.

So far, the crushing and screening portion of the process flowsheet will be covered with the launch of My Plant Planner, but, based on customer feedback, the company plans to expand to the filtration process and other downstream elements.

As to why the company started with crushing and screening, the answer is an obvious one, according to Lambert.

Metso already has Bruno and VPS software (mine to mill assessments) in place – “we don’t have to reinvent the wheel in this regard”, Lambert said – and it is the area of the flowsheet that tends to come with the most equipment options.

“You can have three crushers in parallel, or one big one; a large screen in close circuit, or a smaller one in open circuit, etc,” he said.

It is this flexibility that miners require today. New projects coming to the table are very rarely 20-plus year developments that require a uniform comminution process over their lifetime.

Capex-conscious miners and their investors are instead bankrolling developments that tend to come with less than 10 years of life and are conservative when it comes to throughput. This is with the idea that they will fund the mine life extensions and expansions from existing cash flow when the operation is at full tilt.

These growth plans will inevitably come with the need to amend the process flowsheet down the line – which is where the plant footprint visualisation ability of My Plant Planner could come into play.

Flexibility such as this is also coming into Metso’s equipment line-up, with the company, only last week, launching its flexible FIT™ and smart Foresight™ crushing and screening stations for mining.

The FIT stations are designed with a focus on speed and flexibility, with two stations to choose from – Recrushing station and Jaw station – while the Foresight stations are equipped with smart automation technology including Metso Metrics™, VisioRock™, level sensors and crusher variable frequency drive.

These modular solutions are geared towards reducing capital expenditure and providing shorter lead times. In other words, they offer more flexibility.

It is tools such as My Plant Planner that will highlight just how important this flexibility could be over the life of mine of a chosen operation, providing users with the visibility to help navigate choppy commodity cycles and ensure their operations remain profitable over the long term.

You can find more details on My Plant Planner by clicking here.

Weir Minerals targets customer ‘pain points’ with integrated solutions teams

Automation, Comminution of minerals, Environmental, Equipment maintenance, IoT, Mineral processing, Mining consumables, Mining equipment, Mining maintenance, Mining services, Mining software, Sustainable mining, Water management, , , , , ,

Weir Minerals says its integrated solutions teams are combining experience from comminution to tailings, from chemistry to hydraulics, to deliver reliable solutions that solve its customers’ most frustrating pain points.

Since brothers James and George Weir founded what would become the Weir Group with their 1871 invention on the Weir boiler feed pump, engineering expertise, the company says, has been the driving force of its success.

“For almost 150 years, Weir has built its business on the principle that if something’s worth doing, it’s worth doing right and to do something right on a mine, you need the right team,” it said.

This is where the company’s integrated solutions teams come in, which combine technical expertise, local access and global knowledge to optimise mining companies’ entire process, according to the company.

John McNulty, Vice President of Global Engineering and Technology for Weir Minerals, says the industry needs integrated solutions now more than ever.

“With this approach, we continually listen to our customer’s pain points and identify ways in which we can improve their process,” he said. “Integrated solutions also aligns closely with the Weir Group’s sustainability strategy.

“We often talk to our customers about the challenges they face in terms of energy consumption, water usage and waste, and brainstorm ways in which we can help reduce their environmental impact. In this current climate, this approach is absolutely critical.”

When confronted with a problem that requires more than a single piece of equipment, Weir Minerals draws on its integrated solutions teams, made up of process engineers, design engineers, product experts, materials scientists, supply chain and logistics experts, as well as local sales teams who know the customer’s site.

These multi-disciplinary teams ensure a problem is considered from all perspectives, identifying potential issues and opportunities to optimise the circuit with upstream and downstream benefits, according to Weir Minerals.

With almost 10,000 employees operating in more than 50 countries, Weir Minerals can build teams with experience working in every kind of mine and quarry, in environments ranging from Canada’s frozen oil sands region and Indonesia’s rain-prone coal mines to remote deserts in Chile, Mongolia and Australia.

“As well as optimising equipment to provide maximum efficiency and wear life in any given situation, the integrated solutions team’s expertise allows them to tailor solutions that can be flown onto site when the roads freeze in the winter, prevent crocodiles climbing onto floating equipment, and utilise waste products like tailings as a resource,” the company says.

Seda Kahraman, a Regional Process Engineering Manager for Weir Minerals, says the company believes nothing is ‘impossible’, with engineers continually looking for better ways of doing things.

“Our team is made up of specialists each possessing different process systems’ expertise including, but not limited to: troubleshooting, designing tools and process simulation programs,” he said. “We combine this wealth of knowledge to deliver innovative solutions that address our customers’ varied needs.”

The key to Weir Minerals’ integrated solutions approach is the entire team of experts collaborating to identify all root causes of a customer’s challenge, considering all the contributing factors – which is where Weir Minerals’ interdisciplinary expertise is so important, it says.

The team perform process audits during site visits to identify bottlenecks and then, using flowsheets, mass balances, 3D layouts, and feasibility studies, advise on the most appropriate solution for the customer to not just resolve the problem they came to Weir Minerals with, but to optimise their process to save energy, reduce water waste or increase capacity, and ultimately save the customer money.

Ritchie Bros shifts to online auctions on sustained demand for heavy equipment

Mining equipment, Mining services, , ,

While many are isolating at home during the COVID-19 pandemic, Ritchie Bros says the world of heavy equipment auctions is still turning.

The industry leader has taken all its auctions online and has so far seen very little change in anticipated demand – or selling price levels – for secondhand construction and agricultural machines over the last few months, it said. The company also sells mining equipment through its auction marketplace.

Karl Werner, International President at Ritchie Bros, said: “Despite these uncertain times, we’re hearing from customers that there is still lots of work going on in the world – maintaining highways, power and telecommunications, water and sewerage systems, as well as transporting groceries and medicines – and we provide the equipment to companies delivering these essential services.

“The regular in and outflow of fleet management does not stop, and we’re here to help with a variety of sales solutions and contract options to suit any need.”

Over its 62-year history, Ritchie Bros has become a trusted advisor in the industry, with millions of clients around the globe counting on the valuable insight it provides, it says.

“We have accumulated a huge amount of market and selling price data – on equipment types, makes and models, and manufacturing years – that we leverage to our clients’ advantage,” Werner said. “Using this data and our experience, we will recommend the right time and place to sell – whatever is going on in the world.”

Beyond keeping its auctions and marketplaces up and running, Ritchie Bros says it has demonstrated its commitment to sellers during these challenging times by offering several flexible selling options to ease cash flow. Most notably, it has an advance payment option, where sellers can provide funds in advance against the expected sale price for equipment, if a seller does not wish to wait until the next scheduled auction.

“Our vast experience of buying and selling equipment around the world means we can estimate equipment value with a high degree of accuracy. Final sale prices are usually within a small range of our expectations,” Werner says. “That allows us to offer customers the option of drawing funds in advance of a sale with an advance payment or using another of our bespoke selling options. We’re seeing in these times there is more need for services like this.”

In addition to advance payment services, sellers can also transfer ownership directly to Ritchie Bros to limit administration around the sale. Equipment owners can receive individual selling advice by talking with a Ritchie Bros representative, who, the company says, will establish the best disposition choice for them.

“Naturally, there is some uncertainty at the moment, but we want to reassure our clients and discuss options that will give them the best outcome for their business now and in the long term,” he concludes.

Metso Minerals orders hold up in face of COVID-19 impacts

Comminution of minerals, Equipment maintenance, Mining consumables, Mining equipment, Mining finance, Mining maintenance, Mining services, , , , , ,

Metso’s orders and sales held up in the March quarter in the face of the onset of COVID-19, with the company saying activity in its mining equipment business continued in line with expectations.

The company posted a 5% year-on-year increase in orders received to €1.07 billion ($1.15 billion), while its sales were unchanged at €832 million. Its operating profit dropped to €73 million, from €100 million a year earlier, but it was still able to generate free cash flow of €78 million during the three-month period.

Metso said the measures taken to prevent the spread of COVID-19 started to have a material impact on its businesses and financial performance only towards the end of the March quarter. It was around this time that the company outlined its COVID-19 strategy.

“In February, the businesses and operations in China were affected but this impact was offset later, thanks to a fast ramp-up in March,” it said. “Quarterly orders from China were higher year-on-year, while the drop in sales will take longer to catch up.”

Lockdowns were introduced in mid-March in other countries, with the restrictions in India having had the biggest impact on Metso, it noted. There was some positive news, with, as of mid-April, operations in India and South Africa being permitted to ramp up.

In terms of customer demand, Metso said, from mid-March, the biggest COVID-19-related impact came from its aggregates equipment business, where customers and distributors significantly reduced their investments.

The mining equipment business, however, continued in line with expectations.

“The importance of the mining operations for many countries has been visible in the continued healthy demand for spare and wear parts,” Metso said, while noting that restrictions relating to travel and workforce mobility have had an impact on mining services by limiting service work carried out at customers’ mines.

Its Minerals business saw a 6% year-on-year jump in orders received in the March quarter, while services orders rose 5%. Growth of 8% in equipment orders was supported by the acquisition of McCloskey, it said, noting that mining equipment orders increased slightly against a high comparison period, “highlighting the healthy market activity.”

Metso reaffirmed that its partial demerger and the transaction to create Metso Outotec and Neles continue to progress according to plan, with closing currently expected to take place on June 30, 2020, subject to regulatory approvals.

Outotec to deliver sustainable plant improvements at First Majestic Silver assets

Comminution of minerals, Mine operation news, Mineral processing, Mineral project development, Mining equipment, Mining services, Precious metals, , , , , , , , , , , ,

Outotec has been awarded a contract by First Majestic Silver for the delivery of minerals processing technology for its mill optimisation projects at the San Dimas silver-gold mine and Santa Elena silver-gold mine, in Mexico.

The circa-€15 million ($16.3 million) order has been booked in Outotec’s 2020 March quarter order intake.

Outotec’s scope covers the design and delivery of an AG mill, counter current decantation thickener and a tailings filter for San Dimas, and thickeners and a tailings filter for Santa Elena. The deliveries are expected to take place in 2020 and 2021, it said.

Outotec previously delivered HIGmill® high-intensity grinding mills to First Majestic, with one of these going to the Santa Elena operation (pictured), where it has significantly improved the recovery of silver and gold.

Paul Sohlberg, Head of Outotec’s Minerals Processing business, said: “The energy efficient AG mill and environmentally sound thickeners and tailings filters will enable First Majestic to improve plant operations in a sustainable way.”

Back in January, First Majestic President & CEO, Keith Neumeyer, said the company’s 2020 focus remained on “adopting new innovation projects to modernise our processing plants to achieve higher recoveries, improve efficiencies and reduce operating costs”.

He added: “We have witnessed significant benefits from high-intensity grinding at our Santa Elena operation in 2019 and we plan to install the same technology at San Dimas in 2020.”

The company, at that point, said it expected to increase production at San Dimas by restarting mining operations at the past-producing Tayoltita mine by the end of the March quarter, expecting to ramp up production to 300 t/d by the end of 2020. The Tayoltita mine was the original mining area at San Dimas and known to contain higher silver grades.

It said a new 3,000 t/d HIGmill circuit and AG grinding mill would be installed in the second half of 2020 to further improve recoveries and reduce operating costs.

At Santa Elena, meanwhile, it said it planned to install an AG/SAG grinding mill by the end of the year, with a dual-circuit flowsheet implemented to separate the ultra-fine and coarse particles prior to leaching to further improve metallurgical recoveries and reduce energy costs.

Komatsu boosts productivity on P&H electric rope shovels

Equipment maintenance, Mining consumables, Mining equipment, Mining services, , , , , ,

To maximise the performance of one of the hardest working pieces of equipment at a mine site, Komatsu has launched a new line of dippers for its P&H electric rope shovels.

The new TRC dipper series is named for the three design innovations that make up its next-generation technology designed to increase productivity, reduce total cost of ownership and enhance safety, the company said.

The three innovations include:

  1. A trapezoidal shape that maximises capacity without adding additional weight;
  2. A roller latch system and door that lowers door stress levels resulting in improved life and reduced rebuild costs; and
  3. A cast equaliser that provides up to 1.98 m of additional dig and dump height, creating more flexibility to keep up with changing mine plans.

These new dippers are designed to help mine operators improve productivity through a design that increases dipper volume, maximises full digging forces and provides reliable door opening and closing, Komatsu said.

“Total cost of ownership is lowered, compared to traditional dipper designs, through the use of components that will frequently last rebuild to rebuild and design factors that reduce wear,” Komatsu said. “Longer living components and a reduction in wear translates to fewer maintenance needs, to lower cost and drive for zero harm.”

Brian Fox, Vice President for Surface Products, Aftermarket and Technology at Komatsu Mining, said: “We’ve got a deep history of working closely with our customers in the mining industry to develop the tools they need to solve the unique challenges posed by mine sites.

“The design and technology built into our new TRC dippers is based on the knowledge and experience we’ve gained over 135 years in the mining business.”

Sandvik cuts work hours, temps/consultants, spend on COVID-19 concerns

Mining equipment, Mining events, Mining finance, Mining industry recognition, Mining services, , , ,

With the COVID-19 virus continuing to affect business operating conditions, Sandvik says it has initiated measures to support savings both in the short and long-term.

The initial focus is on short-term activities with quick impact such as reduced worktime, reduction of temporary employees and consultants, and reduced discretionary spend, it said. Structural changes and reductions in work force to adapt to changed market conditions in the longer term are, in addition, being reviewed.

While the company said business development during January and February 2020 had been in line with its expectations – with the exception of China where the COVID-19 situation led to one week of prolonged closing of its operations around the Chinese New Year (the operations are now up and running and approaching normal capacity) – during March, the uncertainty has gradually increased in many other parts of the world, it explained.

“Most production units in the Sandvik Group have been able to continue operating, however due to government restrictions the production is currently on hold in Italy, India and partially in other regions,” Sandvik said.

“Although Sandvik currently believes that the direct impact on its financial performance during the first (March) quarter will be limited, Sandvik has identified a need to mitigate future effects on our businesses from the rapid spread of the coronavirus.”

The “temporary short-term actions” primarily related to reduced working hours, will generate savings of about SEK1.5 billion ($147 million) in 2020. The initiation of long-term “structural measures” imply costs of about SEK1.4 billion reported as items affecting comparability in the operating profit in the June quarter of 2020, with the majority impacting cash flow, Sandvik added. It expected savings of about SEK900 million from these long-term structural measures, which will reach full annual run-rate by the end of 2021, though.

Sandvik said: “Actions to reduce worktime will mean a temporary negative effect on the compensation for many employees. The members of the Sandvik Group Executive Management have therefore also decided to reduce their salary by 10% during this period.”

On top of this, the Sandvik Board of Directors proposes that the Annual General Meeting resolve on a dividend of SEK3/share, compared with the previous proposal of SEK4.50/share.

“It is the Board of Directors’ intention to convene an Extraordinary General Meeting before the end of October this year to resolve on an extra dividend of SEK1.50, assuming that the market has stabilised and the financial position of the company so permits.”

Stefan Widing, who only took up the role of President and CEO of Sandvik on February 1, said the COVID-19 situation had escalated around the world and the company had to adapt to this “dramatic change in global business conditions”.

He said: “Divisions within all three business areas are taking prompt action in order to secure our long-term market leading positions and protect our company.”