REPORT: Australia’s mining equipment value in serious decline
A new report by Enrst & Young reveals the value of Australias mining equipment market has fallen 4...
For the mining sector the hits just keep coming.
A new report by Enrst & Young reveals the value of Australia’s mining equipment market has fallen 46 percent over the past 12 months--and 64 percent since 2013--due to plunging commodity prices and mine closures. The value of mining equipment like dozers, excavators and trucks are now at decade-low prices.
Paul Murphy, EY Ocenania mining and metals transactions leader said the “free fall” in value is expected to continue.
“Further declines in commodity prices make it extremely unlikely the yellow goods market for mining equipment will see any recovery this year,” Murphy said in EY’s 2016 Australian Yellow Goods Report.
The “yellow goods” market indicates the strength of the market and is based on an average fleet of 20 haul trucks, three excavators, two wheel loaders and three dozers.
The report said there is approximately $600 million to $1 billion of mining equipment currently unutilized and indicated about 1500 haul trucks lay idle in Queensland alone with few signs of improvement since September 2015.
"At the end of the day it's capacity utilization and demand for that equipment," said Murphy.
"So it is no surprise, given the low commodity prices for bulk operations like iron ore and coal, that there's as not much demand, and a bit more supply, for that fleet, than there was two or three years ago."
Murphy added, “Values are at historical lows so for anyone with scale, finances and nerve, there is the potential to opportunistically assemble a mining equipment fleet at once-in-a-lifetime prices.”
Coal India Secures First-Of-Its-Kind Digital Deal
Coal India Limited (CIL) has appointed Accenture Solutions to digitally transform seven of its open-cast mines as the company strives to improve performance and increase coal production. Accenture is due to lay down digitalisation groundwork until March 2022.
The deal aims to increase coal production by 100 million tonnes (MT) by the end of FY’23. Once the minimum quantity has been surpassed, an agreed sum will be paid to the consultant for every additional sum of coal produced. This success fee will only be paid on the procurement of the minimum assured quantity.
The move will see heavy earth moving machinery (HEMM) fitted with digital sensors to monitor performance efficiency at all levels. Additionally, modern data analytic techniques aim to increase mine productivity and project monitoring through functional system management and effective observation.
An Exciting Venture For Global Mining
CIL, which aims to provide energy security in an environmentally and socially sustainable manner, hopes the move will help transform the entire business of mining operations and ensure higher volumes of coal are acquired at a lower cost.
“This is a first of its kind initiative by the company utilising digitalisation to ramp up coal output,” CIL has said.
A Digital Step Towards Enhanced Performance
Digitalisation is expected to take place at open-cast mines in Kusmunda, Gevra, Dipka of Southern Eastern Coalfields (SECL), Migahi, Jayant, Dudhichua, and Khadia of Northern Coalfields (NCL). Nearly 32% (188 MT) of CIL’s 596 MT output in FY’21 was accounted for by the seven selected mines. However, this new deal is set to see a large increase following the subsequent digital changes due to be made.
“Learning from the outcome and success of this model, we may replicate it in our other large mines,” says CIL, optimistic about the future following the modernisation of their mining.
It is expected that the move will help address roadblocks and guarantee corrective measures are put into place, ensuring the company is able to move forward with its aim of increasing output whilst remaining sustainable and eco-friendly.