Tag Archives: Per Lindberg

Epiroc trusting its 6th Sense on mine automation, electrification, digitalisation developments

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During an enlightening Capital Markets Day, in Stockholm, Sweden, Epiroc backed up its credentials as a leader in the mine automation, digitalisation and electrification spaces, outlining its progress to date and its medium- and long-term plans to capture more market share.

A few weeks after putting on the investor showcase – but before Helena Hedblom was announced as the incoming President and CEO – IM spoke with President and CEO, Per Lindberg, and Senior Vice President of Corporate Communications, Mattias Olsson, to get some detail behind the presentation slides.

IM: Automation featured very widely in the capital markets day (CMD) presentations earlier this month: In general, how would you characterise the mining industry appetite for this new technology? Where is the average customer on your automation scale?

PL: First of all, the appetite is very large; most customers are looking at automation in one way or another.

It is hard to do a mathematical average when it comes to where the industry currently is, but the average miner is probably down on the left-hand side of that scale (pictured below) – somewhere in between tele-remote and single machine automation.

IM: Over the next five years, where do you see most potential growth for autonomous solutions in terms of underground or open-pit mining? What market dynamics are accelerating this uptake?

PL: Most likely it will happen in both surface and underground. The potential for productivity and safety improvements is probably greater in underground, though.

This trend is clearly driven by productivity, cost efficiency and safety. Those would be the key drivers for automation. It is about taking people out of the line of fire, as well as having close to 24/7 production.

IM: Following the 34% stake acquisition of ASI Mining last year, would you say the project Epiroc and ASI are working on at Ferrexpo’s Yeristovo mine is representative of how you envisage doing business together in the future?

PL: That is the reason that we initially acquired the 34% stake in ASI Mining; we wanted to go in that direction. In that respect, I think the Ferrexpo example is representative of how we will cooperate with ASI.

Of course, ASI can also offer a standalone solution without Epiroc being present on the automation side, so we are also promoting their offering too.

IM: How does Epiroc, as an OEM, balance its machine building and maintenance service offering? Does the ability to keep machines working longer through sophisticated monitoring systems and better manufacturing somewhat inhibit your ability to sell new machinery?

PL: To a certain extent, we are probably cannibalising our new machine sales with increased service intensity and improved servicing products. That is most likely the consequence. On the other hand, we also feel that it is only right to offer this type of aftercare and servicing.

Yet, you cannot continue to prolong the life of a piece of equipment forever. It needs to be replaced at some point.

Overall, the servicing offering works well for us and, we think, it is good for our customers in terms of increasing the life of their equipment.

IM: Factoring this in, what percentage of revenue is your aftermarket business likely to represent in the next 10 years (from 65% today)?

PL: It’s difficult to say if it is going to be higher, or not, but it is likely that the volume of service will increase. That is based on what we are talking about – the intensified servicing we are offering, the products we have developed and the fact that we are increasing the market share within our own fleet.

Whether it continues to be 65% of the overall business depends on activity in the rest of the group.

IM: Along these lines, how long does the company anticipate its new battery-electric loading fleets lasting compared with, say, the diesel-powered fleets you were selling 10 years ago?

PL: The wear and tear of the actual machine will be the same – that is not going to change because of the drivetrain.

But, having an electric drivetrain is different from diesel; we have to see what the long-term maintenance needs are compared with diesel. The life of the drivetrain also depends very much on the utilisation of the machine.

IM: Of the recent innovations the company has launched (or is about to launch) – 6th Sense, a semi-automated explosives delivery system (with Orica), Scooptram Automation Total, Powerbit, etc – which has the strongest business case in mining?

PL: I think 6th Sense is really a packaging of all of our different offerings within automation. In that regard, it is has the highest potential. Which components of 6th Sense have the highest potential? We’ll have to wait and see.

The semi-automated explosives delivery system with Orica is a very specific innovation, but we very much believe in automating this mining process because of the safety and productivity benefits it brings. But we are only just starting this development compared with 6th Sense, which has already launched.

Powerbit is, again, very specific, but…allows us to deliver a complete offering both in terms of machine and consumables that will enable higher productivity and automation. That should have a high potential in the market.

IM: What does the Epiroc mining roadmap look like for the next 10-30 years? I imagine wider adoption of hard-rock cutting, automation, electrification and digitalisation are in there, but what other technology evolutions are being planned for?

PL: We have to continue to work with all of those three – automation, electrification and digitalisation – as they will deliver significant benefits for the industry. That is where we need to focus over that 10-year timeframe.

These three also have the potential to further integrate the value chain in mining within the future digitalisation space. We need to both continue to work with these technologies and our customers to ensure we have greater market penetration in all these areas.

IM: And, hard-rock cutting? Is this as important as these three?

PL: For specific applications, mechanical cutting and the Mobile Miners have their relevance and work well. But we believe for the foreseeable future, the majority of hard-rock excavation will be carried out by drilling and blasting in the mining and tunnelling sectors.

IM: During the CMD there was mention of “cost per measure” contracts under the digitalisation heading. Could you go into some detail about how the company is offering these and if they are tied in with financing agreements for your equipment?

PL: In terms of cost per measure, one example would be cost per metre contracts in consumables and rock drilling tools.

MO: We also provide finance for equipment and it could be that the equipment is financed and we have a cost per metre contract in place. Those two are not connected or tied, though.

It could be that there is more of this ‘pay-for-performance’ type of contract in the future – where you charge per tonne of ore excavated, for example – but, if it does come, I don’t think it will happen quickly.

IM: Similarly Epiroc talked about “new business models” in 2020 for underground equipment at the CMD. What might these new business models be? What is the need for them?

PL: It could be revenue streams into software, to information management, to advanced service agreements, to Batteries as a Service for battery vehicles.

The reasons for establishing these models is the continuous development of software, new updates for machines, etc that require different models.

When it comes to Batteries as a Service, it is a different model again looking to transfer the energy cost of the battery from capex to opex in order to facilitate the timely decisions for customers and reduce the cost of operation for our customers.

These new models are all based on development of technologies.

Growth and innovation on the agenda, Epiroc’s incoming CEO says

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The timing of the announcement of Helena Hedblom becoming Epiroc President and CEO might have caught investors off-guard, but the actual appointment is no big surprise.

The news came just 12 days after the company held its second annual Capital Markets Day where Hedblom and Per Lindberg, current President and CEO, gave investors an update on the progress the company has made on its strategy since starting operations under the new brand in November 2017.

Hedblom, who currently heads up the mining and infrastructure divisions for Epiroc and is due to take on the top role from March 2020, has been a major part of Epiroc’s Group Management team since it was formed. Her ties to Atlas Copco, meanwhile, date back to 2000, with her roles including Head of Research and Development and General Manager for rock drilling tools business Secoroc and, then, becoming President of Atlas Copco Rock Drilling Tools.

Epiroc has launched a number of new initiatives in the mine automation, digitalisation and electrification spaces since the end of 2017, and Hedblom has been instrumental in all of these, spelling out the business case to investors, making sure the engineering capacity is available and taking all of the technical questions that may come Epiroc’s way.

With mining making up 76% of order intake for Epiroc in the nine months to the end of September – and the company keen to build on its leading position in the sector – it is logical for someone with Hedblom’s experience to take the top job following the successful establishment of Epiroc under Lindberg.

On a conference call today following the announcement, Ronnie Leten, Chairman of Epiroc, said current company head, Per Lindberg, had achieved the goals set for him by the board and that Hedblom had been given a new mission: to achieve “higher levels” of growth for Epiroc.

That is a bold statement considering the company has achieved a compound annual growth rate (CAGR) of 10% over the period from 2015 to 2018 through a number of organic and inorganic investments, and a 14% CAGR in the 12 months to end-September 2019. This is all while retaining a comparatively high average operating margin of 18.3% and 20.1%, respectively, over those same timeframes.

Hedblom, speaking to IM shortly after that call, explained the growth mission given to her by her incoming Chairman.

“It’s a combination of organic initiatives within the company, as well as inorganic initiatives,” she said. “But, of course, within that, the big technology shifts with automation, digitalisation and electrification give us an opportunity to help our customer gain safety, productivity and energy benefits. That is a big focus area for us.”

She is also looking to grow the company’s aftermarket business – which already accounts for 65% of revenue – explaining: “This is where we can make a difference with our customers and really be a productivity partner. It also gives us resilience across the cycle.”

Looking to the “initiatives”, specifically, she said there could be some organic product developments to close some “gaps we have in the portfolio”, but also strengthening “our presence… in some areas where we don’t have the market reach today”.

While these growth initiatives will most likely be in markets the company has already deemed to be core, she said all divisions within the company had a roadmap looking into opportunities that are “adjacent to core”.

One area of Epiroc investment Hedblom was keen to talk up was R&D, which in recent years has enabled the company to retain a leading position in the likes of autonomous surface drilling, battery-powered underground vehicles, and mine digitalisation and automation.

“We have a good level of investment in R&D,” she said, adding that, at the moment, it is heavily skewed towards automation, digitalisation and electrification.

“Bear in mind that 65% of our revenue is in the aftermarket and we are already investing 2-3% of revenue in R&D – that represents quite a big investment on the capital equipment side,” she said.

She concluded: “That (R&D investment) is needed. For me, innovation is key. That is how we stay ahead of technology leaders in all of these areas.

“I expect R&D investments to stay at this level, and this is extremely important to creating sustainable growth for the company over the long term.”

Epiroc charged up by automation, digitalisation and battery equipment wins

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Epiroc’s second ever Capital Markets Day, in Stockholm, Sweden, was an enlightening affair, with the original equipment manufacturer backing up its credentials as a leader in the mine automation, digitalisation and electrification space.

Speakers including Per Lindberg, President and CEO; Helena Hedblom, Senior Executive Vice President Mining and Infrastructure; Sami Niiranen, President Underground Rock Excavation; and Jose Sanchez, President Drilling Solutions, with all of them reeling off a number of statistics worth highlighting.

For example, the company said around 60% of Epiroc equipment is now being delivered with its rig control system (RCS), a system that on Pit Viper blasthole drills is the next “evolutionary step toward fully autonomous mining”, the company recently said.

At the same time as this, 3,400 of its machines have been delivered with “connectivity”, Lindberg said, a transition that is allowing customers to monitor, in real time, elements of a machine’s performance. As recently as the company’s June quarter results release, Lindberg said more than 2,500 machines were ‘connected’.

When it came to automation underground, Epiroc said it had 43 projects on its books, with 600 drill rigs equipped for complete automation of the drilling process; the latter up from the more than 550 Lindberg quoted in the June quarter results.

Epiroc has also seen a 30% increase in utilisation of connected Simba production drills globally, according to Lindberg.

On surface, meanwhile, Epiroc was involved with autonomous and teleremote drilling in 16 countries on five continents, he said.

Among these automation projects were the fully autonomous electric drill at Boliden’s Aitik copper mine, in Sweden, an autonomous SmartROC D65 at Newmont Goldcorp’s Hollinger mine, in Canada, and autonomous Pit Vipers at the leading gold miner’s Penasquito mine, in Mexico.

A map shown by Sanchez also included first remote/teleremote operations in Morocco, Ukraine (see Ferrexpo Yeristovo story), Chile and Papua New Guinea. There was also mention of first autonomous solutions in South Africa (along with a first multipass autonomous operation) and a first autonomous drill in operation in Australia.

And, of course, the company provided an update on its battery-electric solutions, which Epiroc believes will improve health and safety, reduce emissions, lower total cost of operation and improve productivity for its customers.

Lindberg said the company had accumulated 100,000 hours of battery-electric machinery operation to date and, so far, customers had achieved a more than 70% reduction in energy consumption – mainly through reduced ventilation needs.

On the company’s recently-launched Minetruck MT42 Battery, specifically, Niiranen said Epiroc had observed 10% increased productivity through faster ramp cycle time at operations where the machine was being trialled/operating. One of these machines is currently being trialled at Agnico Eagle’s Kittilä gold mine, in Finland, as part of the EU-funded Sustainable Intelligent Mining Systems project (a project Epiroc is coordinator of).

Epiroc lifts the lid on automation success in Q2 results

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After many years of automation talk, the mining industry finally appears to be investing in this new technology judging by Epiroc’s latest financial results.

The Stockholm-based company reported record revenue of SEK 10.6 billion ($1.13 billion), alongside a 25% year-on-year operating profit increase to SEK 2,263 million in its June quarter financials, but the most interesting elements from this release were comments from the company on automation.

Epiroc says it is a market leader in automation, connectivity and battery-electric vehicles, with the company noting customer interest in, and demand for these solutions, is growing quickly.

In the quarter, the company launched 6th Sense, its new offering of solutions to enable customers to optimise processes by connecting machines, systems and people using automation, information management and system integration, and to achieve higher production at lower operating costs.

Even though it is early days for this initiative, Per Lindberg, President and CEO of Epiroc, said the company has more than 2,500 connected machines on its books; a number that is rapidly increasing.

“For example, for production drill rigs, the number of connected machines has doubled in the last year. We also see that connectivity is an enabler for increased utilisation,” Lindberg said.

In underground drilling, Lindberg said more than 550 of its drill rigs are equipped for complete automation of the drilling process and, in surface drilling, it has the largest installed base of autonomous rotary drill rigs. On the latter, the world’s first fully autonomous SmartROC D65 down-the-hole drill rig is now operating in Canada, it said.

“Also, the interest in our next generation underground battery-electric vehicles continues to be strong and we received more orders for these machines in the quarter,” the company said.

Epiroc books battery-electric equipment order from Canada underground mine

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Epiroc received a large order for its battery-electric underground equipment from Canada in the March quarter, the company confirmed in its latest quarterly results.

The company, in November, launched its second-generation battery-electric solutions in Örebro, Sweden, presenting 14 t and 18 t LHDs, a 42 t truck (MT42) and its mid-sized drilling family including face drilling, production drilling and rock reinforcement rigs.

In the March quarter results, the company did not mention the name of the miner, the site the equipment will be deployed at, or which machines will be used at the operation, but, at a Bauma media roundtable event, President and CEO, Per Lindberg, said of the recent second generation launch: “We can say that the reception has not been worse than expected. It has been better than expected, and we have high expectations.”

And, earlier this month at The Electric Mine conference, in Toronto, Canada, Morgan Rody, Senior Project Manager: Sustainable Intelligent Mining Systems (SIMS), Global Strategic Projects and Alliances, Epiroc, said one of Epiroc’s second-generation battery-electric drill rigs was set to arrive at Agnico Eagle’s Kittilä gold mine, in Finland, in a matter of weeks as part of the SIMS project.

Going back to the mining equipment manufacturer’s Q1 results, the company said orders received came in at SEK 10.06 billion ($1.06 billion) during the quarter, a year-on-year organic decline of 5%, while both revenues and operating profit rose – 19% to SEK 9.79 billion for the former and 27% to SEK 1.93 billion for the latter.

The company’s operating margin went from 18.4% a year earlier to 19.7%, while its basic earnings per share jumped from SEK 0.89/share to SEK 1.14/share.

Lindberg said, during the quarter, the company’s service business continued to grow “healthily”, having a positive impact on the group’s overall profit.

“Equipment revenues increased versus last year, but fell sequentially compared to the very strong Q4, which had a negative effect on our cost efficiency in the quarter,” he said.

“In the Tools & Attachments segment, we are pleased to see that our efficiency actions had a positive effect on the operating profit and margin. Working capital increased in the quarter, and continues to be a focus area for improvement. The operating cash flow was lower than in the previous quarter as a result.”

He said customer demand in the March quarter was “largely in line with our expectations”, with equipment orders at similar levels to the second half of 2018.

“The majority of mining equipment orders are still for expansion in or close to existing mines rather than for replacement,” he said. “The aftermarket business remained strong, reflecting the solid activity in the market, both in mining and in infrastructure.

“While our customers continue to be active and relatively confident about the future, and the mineral prices are at healthy levels, there are still uncertainties related to the economic development.

“We see that our customers primarily invest in lower-risk projects with focus on increased productivity and efficiency. We do not see any clear indications that the current market situation will change and expect that the demand will remain at the current level in the near term.”

During the quarter, the company completed its earlier announced acquisitions of Fordia and New Concept Mining, strengthening its position in exploration and rock reinforcement, and adding some SEK 1.2 billion in annual revenues, according to Lindberg.

On innovations, automation, digitalisation and battery power, Lindberg remarked: “We are pleased to see that we received several inquiries and orders for automation and battery solutions.”

On top of the battery equipment order from Canada, he said orders were booked for Mobilaris Mining Intelligence and, at the Bauma exhibition in early April, the company had presented a number of innovations, including My Epiroc, “a digital tool to help our customers to become more efficient in managing their fleet”, and its new generation SmartROC D65, an automation-ready surface drill rig.

Lindberg concluded: “In 2018, we put a lot of effort into the split and listing of Epiroc. In 2019, we will focus on improving and developing the business further. Besides the continued emphasis on innovation and new product development, a key focus will be on improving efficiency, agility and resilience throughout the company.”

Autonomous drill rigs, Oyu Tolgoi recognised in Epiroc awards

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Epiroc’s first annual awards have recognised close customer collaboration in Mongolia and innovative autonomous drill rigs in Australia.

Its “United in Performance Award” honours exceptional customer collaboration, the company said. This inaugural award is presented to Anders Berglund, Bayar Torguud, Batzorig Jamsranjav and Alf Lawrence at Epiroc’s Customer Center in Mongolia, as well as to mining company Oyu Tolgoi LLC.

“Their far-reaching collaboration is boosting productivity and safety at Oyu Tolgoi’s major copper mine,” Epiroc said. “With the mine located remotely in the South Gobi desert, Epiroc has developed strong local service capabilities, yielding customer benefits such as on-time spare parts delivery. The companies are emphasising safety and diversity and they have successfully worked together to recruit more women as equipment operators and service technicians.”

The Inspired by Innovation Award, meanwhile, recognises Epiroc’s most innovative technical development that has had a proven commercial success.

It has been presented, this year, to Tyler Berens, Tim Ledbetter and Dustin Penn at Epiroc’s Drilling Solutions division, Lars Eriksson at the Rocktec division, and to Adrian Boeing at the Customer Center in Australia for developing and deploying autonomous Pit Viper drill rigs for BHP.

A fleet of Pit Vipers is operating remotely at iron ore mines in the Pilbara region, some 1,300 km away from the office building in Perth, Western Australia, where BHP’s operators are located.

“This automation solution brings strong customer benefits, including improved work environment, higher productivity and lower operating costs,” Epiroc said.

Back in December, the first autonomous Epiroc Pit Viper 271 drill rig broke ground at BHP’s South Flank iron ore project in Western Australia. This was the first of five autonomous drill rigs to operate at the mine, all of which will be controlled remotely.

Per Lindberg, Epiroc’s President and CEO, said of the awards: “We are proud of our strong teams that continuously focus on making customers more productive and safe while lowering their operating costs. Automation and proactive customer collaboration are two important ways to achieve this.”

The awards will be presented to the winners at the company’s Annual General Meeting on May 9.

Epiroc M&A likely to continue, Per Lindberg says

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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 posts solid Q3 as it looks to battery-electric equipment launch in Q4

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The three months from July to September saw Epiroc increase its orders received, revenue and profits as it registered good customer demand in the markets it serves.

Revenue increased 27% year-on-year to SEK9.65 billion ($1.06 billion), while operating profit jumped 25% to SEK1.90 billion, from SEK1.52 billion.

Epiroc CEO Per Lindberg said it was a solid quarter with strong revenue and profit growth.

“We saw a continued good sentiment and customer demand in the market. Mining production remained high in all major markets and activities in infrastructure continued to be good. The order intake was higher than the previous year, and I am pleased with the strong order development for our service business and also for our surface equipment,” he said.

Lindberg noted that the order intake was lower than in the past two record quarters, though, partly due to fewer large orders received.

“Such large orders are not evenly distributed over time, and will consequently impact quarterly order intake. Orders received are also typically lower in quarter three compared to quarters one and two,” he explained.

For mining equipment a majority of the orders continued to be for expansions in existing mines, he said.

On the company’s innovation initiatives, Lindberg said the company was generating strong interest from its customers with a high share of its equipment ready for automation.

“Our newly inaugurated Control Tower in Örebro, Sweden, is designed to be an innovation arena for exploring and developing automation solutions,” he said, adding that the company would introduce its second generation of battery-operated equipment during the current quarter.

“All-in-all, our customers will benefit from increased productivity, safety and energy efficiency,” he concluded.

Earlier this week, the company announced the acquisition of fellow exploration rock tools manufacturer Fordia.