Large-capacity mining shovel and truck purchases are flatlining, but suppliers hope new models and advancing technology can resuscitate customer demand
By Russell A. Carter, Managing Editor
Trucks, shovels and large wheel loaders have long been mainstays of primary production in most types of surface mining, and both OEM and aftermarket suppliers can point to decades of giving their customers what they’ve asked for—higher truck-body and bucket payloads, lower cost of operation, improved operator safety and more—as a principal driving force that has kept truck/shovel mining at the forefront of the industry’s technological interest for so long.
In good times, miners ask for a lot—they love the big trucks, shovels, and loaders that allow them to operate flexibly and move more dirt, with less people in the pit and fewer trucks on the haul roads, so when reports emerge from equipment auctions in Australia, where late-model wheel loaders that originally cost almost $3 million are being sold for high-five-figure bids; or from South America, where the world’s largest Caterpillar dealer reported that only one mine in that highly active mining region had submitted a public tender for ultra-class haulage trucks (four) in the entire year of 2015, it effectively illustrates the depth of the industry’s slump.
In bad times, miners ask for less—a lot less. In fact, industry spending on big-ticket mobile surface equipment has been in a downward spiral for more than four years, dropping to a level in early 2016 that is about 75% less than the industry’s most recent spending peak in early 2012. The Parker Bay Co., a U.S.-based market research firm specializing in global surface-mining equipment sales and trends, recently released a market analysis for sales of high-capacity trucks, shovels and loaders (see sidebar) that explores this drop-off, noting that its results indicate “large surface mining equipment shipments…are now at levels not seen since the start of the commodities Super Cycle”—representing a 10-year low.
Smaller Equipment—Strength in Numbers
Although it’s apparent that mine operators have hit the brakes on large-equipment purchases, Parker Bay noted in a recent bulletin that there’s a tiny ray of light inside the long, dark fleet-acquisition tunnel—although the total value of mine mobile equipment deliveries declined in the fourth quarter of 2015, the actual number of units shipped increased by 6% over the previous quarter.
The higher number of equipment units shipped, however, is attributed to purchases of smaller trucks and dozers; mine operators just aren’t spending money on ultra-class trucks, massive rope shovels or high-capacity excavators at this time, but high-grade/low-tonnage specialized operations in Africa, Asia and elsewhere are buying significant quantities of smaller equipment that more closely suits their needs. Volvo Construction Equipment’s Terex Trucks division, for example, just delivered 29 Terex haulers—19 TR100s, rated at 100-ton capacity, and 10 TR60s, capable of carrying 60-ton payloads—to a jade-mining operation in Myanmar. A coal mine in Bosnia purchased nine Terex TA300 articulated trucks to haul 30-ton payloads out of the pit.
In an example that underscores the focus on meeting specific, affordable needs forced upon operators by current economic conditions, a large phosphate producer in Morocco found an alternative to buying large, conventional service trucks to maintain its fleet of 22 rigid-body haulers, along with large wheel loaders, two dozen bulldozers, six drill rigs and several water tankers—it converted two Volvo CE A30F articulated haulers into customized service vehicles that can efficiently negotiate the rough terrain at the producer’s mines.
Scania, another global truck builder with a large presence in the over-the-road market, also has market share in the smaller-hauler end of the mine truck market, offering three, four and five-axle dump trucks with up to 46-mt payloads—most of which are available in AWD configurations that enable their use for both in-pit and outbound road haulage.
Scania has been researching and developing driverless truck concepts for some time, and reports that testing of its haulers in real-world site conditions is not far off. Scania’s customers in Australia are already discussing potential application opportunities for the future, with mining very near the top of the list.
Currently, prototypes are being used to test the capabilities of Scania’s remote-control technology. Scania said its Astator test vehicles have been developed to the point where they can now function without a driver in the seat on a test track, running through simulations of loading and unloading under remote control. They’re also capable of safely dealing with obstacles on the road.
Developers at Scania and researchers from technical colleges in Sweden are examining the role driverless trucks could play in future mining scenarios. “Mines are environments that are especially well suited to self-driving vehicles,” said Lars Hjorth, in charge of predevelopment within Autonomous Transport Solutions at Scania. “The area is contained and the operator can control what equipment or personnel are working in the area.”
The company noted that interest is increasing around the world in smaller and more flexible solutions involving specialized mining trucks. “A truck solution is more cost effective, with the total cost per transported ton being significantly lower,” said Hjorth. “The infrastructure costs are also reduced as trucks don’t require specially reinforced roads.”
In Australia, Scania said it is already talking with a number of customers regarding potential applications for driverless trucks, for both off-road environments and on-road usage. “We see a lot of opportunity for Scania to leverage its autonomous truck technology in the not-so-distant future in Australia,” said Robert Taylor, general manager of Scania Australia’s Mining and Resources division.
“Customers are already talking with us to find out how we can assist them to implement this technology for specific applications. There is also a lot of interest in platooning for road train line-haul work as well,” he noted.
Expanding the Lineup
Despite the slump in equipment purchases, suppliers haven’t abandoned product-line expansion and upgrade programs. Last November, for example, Caterpillar introduced its 6015B diesel-powered excavator, featuring bucket capacity sized to cater specifically to applications in small mines, quarries and large earthmoving projects.
In February of this year, Hitachi Construction Machinery Americas introduced five electric mining shovels—the EX1900E-6, EX2600E-6, EX3600E-6, EX5600E-6 and EX8000E-6. Bucket capacities for the new models range from 11 m3 (14 yd3) for the smallest model to 40 m3 (52 yd3) for the top-of-the-line EX8000E-6.
Brian Mace, manager of HCM’s mining applications group, told E&MJ that Hitachi has offered electric excavators as part of its product line since the mid-90s, but the new models are configured specifically for the U.S. and Latin American markets, where electrical power is provided at 60 Hz rather than the 50-Hz frequency common in other parts of the world. Because Canada and Australia impose a particular set of electrical power safety standards on this type of equipment, Hitachi is not quite ready to offer the new series in configurations eligible for use in those countries.
The electric-powered series are identical in most respects to Hitachi’s EX-6 series diesel-powered excavators—except, of course, for the absence of the diesel engine, fuel tanks and air-filtration/muffler systems, which results in the electrical models having an operating weight savings ranging up to 37 tons in the largest model, along with a corresponding lower ground pressure. The space normally taken up by the diesel models’ fuel tanks is used to house the electrical control cabinets in the electric models. The electric shovels also are equipped with a slip ring in the center joint to transmit power to the motor(s). Although the power-handling components on the electric machines are designed to work with either 50- or 60-Hz power, the mechanical gear ratios on the electric versions must be changed to maintain constant hydraulic pump speed at either frequency.
The five new electric models feature advanced Hitachi TFOA-KK motors designed to provide a cost-effective alternative to diesel-powered machines for mining operations where suitable electric power is available. Motor voltage ranges from 6,600 VAC to 6,900 VAC, providing continuous output rated at 610 kW on the EX1900E-6, up to 1,200 kW x 2 on the EX8000E-6.
Mace pointed out that a mine operator’s specific site or project characteristics can have a major influence on which type of machine would be more effective. Greenfield mine projects for which a reliable electrical power supply is not yet available would likely not be a good match for electric excavators, while an operation that must comply with local noise or exhaust-emission restrictions could benefit significantly from their use.
The need for a trailing power cable might put an electric model at a disadvantage vs. a diesel-powered unit at an operation that requires the highest level of mobile flexibility from its excavators. On the other hand, electric shovels models simplify daily maintenance—the machines do not require consumables such as engine oil, filters, coolant or fan belts. Engine-related components are also eliminated, such as radiators, air filters and mufflers. Service life of certain components may be extended due to the elimination of engine-generated heat.
As is the case with the diesel versions, the E-6 series electric drive excavator front attachments use welded, low-stress, high-tensile-strength steel for a full box section design that resists twisting and bending forces. The undercarriage for
the five new models is identical to the diesel machines.
Hitachi recently introduced five new electric-powered, mining-class excavators that, except for the absence of diesel engines and their ancillary systems such as fuel tanks, mufflers, etc., are functionally identical to the company’s popular diesel-powered versions such as the EX8000-6 shovel shown here.
Looking Down the Road
Parker Bay’s Market Analysis and Forecast: Loading and Haulage Equipment, released in early March, reported a 10-year low for large surface mining equipment shipments, which are now at levels not seen since the start of the commodities Super Cycle. With the current downturn approaching the end of its fourth year, the company’s analysis of the global markets for large mining excavators/loaders and haul trucks plots the path forward with respect to the industry’s expected equipment requirements and attendant shipments through 2020.
All historical data contained in the report are derived from Parker Bay’s Mobile Mining Equipment Database, which identifies machines by individual mine in more than 100 countries.
According to the report, during a ten-year period up to 2014, global equipment manufacturers delivered 6,400 large excavators (20-mt-plus payload) and nearly 31,000 large trucks (100-mt-plus payload) with an installed value of nearly $80 billion. While most of this new capacity was required to fuel the growth in mineral output, it became clear that by 2013, more mine capacity had been added than was required by underlying mineral requirements. The escalating oversupply, combined with slowing demand, initiated the downward spiral in mineral prices that continued through year-end 2015. This in turn compelled companies to close many mines, curtail output at others, and drastically cut capital expenditures including those allocated for the equipment covered by the report.
Parker Bay’s analysis examines the factors now impeding a recovery and those that will eventually spur a resumption of growth for these machinery markets.
Chief among these factors are: the excess capacity at mines—including more than 4,000 machines parked and available for resale and redeployment when demand warrants it; the eventual requirement to replace large numbers of the 9,000-plus excavators/loaders and 40,000-plus trucks now in service; and continued growth in mineral demand in spite of currently depressed prices.
Among Parker Bay’s key conclusions:
- Very slow growth in mineral production through 2020 will warrant increases in installed machine capacity of less than 1.5% per year through 2020, compared with annual increases of 7%-10% per year during the past decade.
- The current overhang of surplus machines will reduce nearterm demand for new machines by as much as one-third during 2016 and will continue to reduce new machine requirements through 2018.
- Replacement requirements will be the chief driver in the recovery that will begin in 2017. Despite efforts to extend equipment service life and reduce the need for investment in replacements, mines will eventually have to retire certain machines as they begin to require increased maintenance and repair and become simply uneconomical to continue working.
Parker Bay estimates nearly 2,500 excavators/loaders and 12,000 trucks will reach this stage during 2015-2020. As a result, a substantial majority of all machines shipped during this time will be required to simply maintain the existing fleet.
The result of these combined factors will be an equipment market that continues at current depressed levels through 2016 and begins recovering in 2017. This recovery will escalate during 2018-2020 as these markets have in past growth cycles. But the slow growth in mineral demand will dampen this next cycle to the extent that projected 2020 shipments will still be as much as 25% below the 2012 peak.