Tag Archives: Stefan Widing

Sandvik reinforces underground mining safety focus with DSI Underground buy

Sandvik has signed an agreement to acquire DSI Underground, a global leader in ground support and reinforcement products, systems and solutions for the underground mining and tunneling industries, from owner Triton.

The OEM has agreed a purchase price of approximately €943 million ($1.15 million) on a cash and debt free basis, it said, adding that the company will be reported in the Sandvik Mining and Rock Solutions division.

Stefan Widing, President and CEO of Sandvik, said: “This acquisition is an important step in our growth ambition. DSI Underground’s track record of driving progress and safety in underground operations and its global reach will further strengthen our world-leading market position within mining and rock solutions.”

DSI Underground is present in 70 countries, with 22 production units situated close to end customers, according to Sandvik. The product offering includes bolting systems, injection chemicals and resin capsules.

Henrik Ager, President of Sandvik Mining and Rock Solutions, added: “With the world’s most extensive choice of ground support products and systems, DSI Underground’s offering is highly complementary and enables us to deliver greater value and safety to our customers. The deal gives DSI Underground access to Sandvik’s substantial R&D, global service and sales network, complements our growing aftermarket business and strengthens our leadership in underground mining and tunnelling.”

Michael Reich, CEO DSI Underground, said: “With our knowledge of ground support technologies, we can add a valuable and complementary offering to Sandvik Mining and Rock Solutions. On the other hand, we will benefit from the knowledge of the new group and Sandvik’s global customer network.”

DSI Underground has around 2,000 employees, with revenue for 2020 expected to be about €518 million ($631 million, excluding the four joint ventures that are part of the acquisition). The purchase price is approximately €943 million on a cash and debt free basis.

The transaction is expected to close by mid-2021 and is subject to relevant regulatory approvals.

Sandvik enters LKAB-led SUM project as Volvo Group departs

Sandvik has joined the Sustainable Underground Mining (SUM) project being run by LKAB at the same time as the Volvo Group has exited the Sweden-based collaboration.

The moves come as the iron ore miner looks to “further strengthen a joint endeavour towards sustainable underground mining at great depths”, it said.

To develop the digitalised, autonomous and carbon-dioxide-free mine of the future, in collaboration with other globally leading Swedish companies, LKAB initiated SUM in 2018.

After 2030, LKAB must be ready to mine iron ore deeper in the mines in Kiruna and Malmberget, in northern Sweden. For this, one of Sweden’s biggest industrial investments ever, decisions will have to be taken in the mid-2020s.

“This type of strategic collaboration project is very complex, each company contributes its specific expertise, and the partners will link together both digital systems and operations,” LKAB says. “Providing unique possibilities for SUM, the test mine, Konsuln, in Kiruna will serve as a real mine environment where technology, machines and working methods will be tested.”

Sandvik will be joining LKAB, Epiroc, ABB and Combitech in trying to achieve this goal. The Volvo Group’s earlier partnership in SUM will now take the form of other collaboration with LKAB, the miner said.

Jan Moström, President and CEO of LKAB, said: “In the coming years, LKAB must have a solution in place to be able to mine iron ore at depths approaching or exceeding 2,000 m in a cost-effective way by employing technology that is safe, autonomous, electrified, digitalised and carbon-dioxide-free.

“To enable this, collaboration with other leading industrial companies will be decisive. Sandvik’s longstanding experience of producing underground vehicle systems will complement the ongoing work in an important way.”

Stefan Widing, President and CEO Sandvik, said: “LKAB has used automated equipment from Sandvik for many years and we look forward to the opportunity to extend our collaboration and introduce new and advanced solutions that will set an industry standard.”

Epiroc and Sandvik will be relied on for battery-powered, autonomous and efficient mining equipment and related solutions that will ensure improved productivity and safety in LKAB’s mines. ABB’s role is to contribute knowledge and solutions for electrification, automation, service and maintenance. Combitech, meanwhile, will bring broad expertise and experience when it comes to connecting autonomous processes and people via so-called digital ecosystems.

LKAB says significant progress has been made on the project to date, including:

  • Successful establishment of the test mine, Konsuln, in Kiruna, where testing is carried out in a real mine environment;
  • An integration and collaboration platform, ‘LOMI’ (LKAB Open Mine Integrator) has been developed to enable an open systems architecture whereby all partners can develop modules and solutions that work together;
  • ABB has delivered ABB Ability System 800xA, the control-room console Extended Operation Workplace and a “Collaboration table” for visualising key functions and key figures in the mine, allowing the operator to monitor and control equipment in the best, most sustainable way. The ambition is that everything that is done in the test mine can be approved, planned and controlled via a project office at surface level, so that underground work can be done more efficiently;
  • Epiroc has delivered the drill rig Easer L and Scooptram ST18 LHD, both equipped for automation functionality, for the test mine, and operators and service personnel have been trained. The Easer L, commissioned in 2019, has shown good results in drilling over 50-m-long holes in the test mine, which is an important step for planning the future mine layout. For the loader, during Autumn 2020, the plan is to conduct tests with increasing complexity in terms of automation and interoperability; and
  • Combitech has delivered new solutions for systems platforms on an ongoing basis together with LKAB’s IT department. The aim is to synchronise new technology with existing systems.

In March 2020, the “Testbed for integrated, efficient and carbon-dioxide-free mining systems”, a part of SUM, received funding amounting to 207 million Swedish kronor ($23 million) from the Swedish Energy Agency.

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

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.”