Sandvik is to supply Glencore Queensland Metals’s underground mobile mining equipment and aftermarket parts under a deal struck at the end of June this year.
The agreement, valued at SEK1.4 billion ($160 million) over a six-year lifespan, will see Sandvik become the key provider of drills, loaders and trucks for Glencore’s metalliferous mines in Queensland and New South Wales, Australia. Sandvik will also provide parts, service, rock tools, and digital and automation technology for the new Sandvik fleet.
Following the signing of the agreement on June 30, Glencore placed an initial equipment order totalling SEK300 million, which was reported in the June quarter report, with a Sandvik DD421 development drill the first piece of equipment supplied under the deal on September 1, 2020.
Sandvik Mining and Rock Technology’s Global Account Manager for Glencore, Tim Redmond, says the deal comes after more than a year of negotiations and follows Glencore issuing a heavy mining equipment tender in 2018. Glencore requested an additional response to the tender in early 2019 asking the company to deliver a more innovative and collaborative solution.
Redmond explained that Sandvik was happy to rise to the challenge.
“We spent nearly a year working closely with the Glencore team to identify exactly what was needed for the long-term success of their assets,” he says. “Our solutions enabled us to optimise the upfront capital costs and provide a competitive supply of aftermarket services moving forward.”
Glencore Queensland Metals General Manager − Mining, Simon Pope, says the agreement is significant with all heavy mobile mining equipment at Glencore Queensland Metals sites being supplied by the one OEM, replacing the status quo where equipment from multiple suppliers was used.
“This innovative partnership with Sandvik will help us improve the way we operate and maintain mobile equipment in our underground mines by providing us with a real reduction in the total cost to operate our primary fleet, an important factor in enabling a sustainable future for our mining operations,” Pope says.
As a leading mining equipment manufacturer, Redmond says Sandvik is committed to improving customer’s productivity and profitability.
“Sandvik showcased technologies solutions for collision avoidance, tracking of assets and automation to Glencore and other industry players at the Digitization in Mining conference in Brisbane in 2019,” Redmond says.
Having a fleet with a single technology platform ensures Glencore is in a good position to undertake mine intelligence projects and promote additional automation and vehicle interaction controls moving forward, according to Pope.
“We look forward to working with Sandvik to share operational and maintenance insights through new and emerging technologies and unlocking further improvements in safety for our people and the productivity of our mines,” he said. “Sandvik machines have played a key role in our operations for a number of years and have a proven track record for productivity and reliability.”
Redmond concluded that the Australia Glencore deal creates a model that can now potentially be duplicated in other markets and with other commodities.
“Rather than each party simply trying to get the best price, this agreement adds new value to the relationship and creates benefits for everyone,” he said.