High-horsepower engine sales are stuck in the slow lane, but suppliers are adding new services and performance improvements to pave the way for future fleet expansion opportunities
A worker tightens a valve spring retainer on a 12-cylinder Series 4000 diesel at MTU’s Aiken, South Carolina, engine plant. MTU, a unit of Rolls Royce Power Systems, delivered the first Series 4000 unit to a mining customer in 1996.
Like an audience holding its collective breath while a performer prolongs a difficult note at the end of a song, mining-industry suppliers probably won’t take a deep breath until they hear a higher note of interest from mine owners in placing bigger orders for new production equipment.
In today’s business climate, hardrock producers are largely focusing on reducing operational costs, paring future project plans to an absolute minimum and preserving/extending the useful life of their current mobile equipment assets. One of the consequences of this focus is that trucks and other equipment are in some cases sitting idle — or on their way to an auction site — at mines around the world, and large fleet orders are few and far between. Although some commodity prices showed signs of recovery over the past year, any surge in large fleet purchases is probably still over the horizon for most mining OEMs.
Sitting in the front row of the supplier audience are the major providers of the diesel engines that power mining-class haul trucks, excavators, wheel loaders and bulldozers. As third-quarter 2016 financial reports from Cummins, Caterpillar and others indicate, demand for new, high-payload haulers and diggers — and the large-displacement engines that power them — remains weak, particularly for top of the line, ultra-class trucks and shovels. The most optimistic forecast from these suppliers predicts, at best, a near-term flattening of the downward sales curve that followed the end of the mining boom.
Consequently, it’s been a period of revenue realignment, goals adjustment, and for some engine manufacturers, restructuring to cope with economic reality and better serve the needs of their mining customers. This was evident at MINExpo 2016 — the industry’s largest equipment trade show, held last September — where engine suppliers emphasized new products and services primarily aimed at helping customers keep their high-horsepower diesels running longer and more reliably, even with extended service intervals.