VDMA

The remaining manufacturers of machines for raw material extraction in Germany recognise their opportunity and are investing in developments to further digitalise the global mining industry. In doing so, they are meeting the mining companies’ goals of automation and “zero emission”.

At the end of the first half of 2021, the books of German mining machinery manufacturers show a big plus: Order intake has doubled compared to 2020 (Figure 1). After the Corona-related slow start to 2021, the industry hopes to stabilise business in the current year at the previous year’s level.

Overall turnover during the first half of the year is still below the previous year’s figure. But in June, the 145 manufacturers of equipment for raw material extraction organised in the VDMA Mining Association, Frankfurt/M., recorded a direct year-on-year increase in turnover of 8 %.

Parallel to the development of turnover, exports of mining equipment from Germany have not yet fully recovered. In the first half of 2021, the value of technology exported from Germany was still 8.6 % below the corresponding figure for the previous year, reaching close to under 709 M €. The better export figures from the previous year used for comparison also result from the long-term nature of mining projects worth millions. In 2020, a lot of equipment was delivered that was ordered before the outbreak of the Corona pandemic.

But Corona notwithstanding, global demand for machinery is generally good again this year. Asia, especially China, and many other countries are returning to growth. Government stimulus packages, e. g., in China or the USA, with investments in infrastructure and decarbonisation, are providing further momentum. For many raw materials, such as metals, plastics or coal, the rapid increase in demand can hardly be met. As a result, many commodity prices are reaching new highs. In this environment, global mining companies have earned properly – especially with copper, iron ore, coal and gold.

This makes now a good time for mining suppliers to present new ideas for the extraction and processing of raw materials. Above all, offers for further automation, digitalisation and zero-emission innovations are sought after. A look at the global mining industry shows a clear focus on climate and environmentally friendly processes as well as digitalisation. The pressure for this is coming from the financial sector. There are many ways to achieve the goals – from alternative drives for the equipment to autonomous operation and the necessary communication and data technology. Ultimately, this means: digitalisation everywhere.

Therefore, work on the technology and data standards required for digitalisation is likely to be essential for the export success of German solutions. VDMA Mining is working with national and international partners within the OPC UA Working Group Mining on the corresponding Companion Specification Mining. Various work processes have been recorded in use cases and processed as Companion Specifications. In spring, further processes from the preparation of raw materials and internal transport were added. With this work, the German manufacturers are also pursuing the goal of setting the standards necessary for further digitalisation and automation in this country. (VDMA Mining/Si.)

The mining equipment industry in Germany anticipates a decline in sales for 2020 of around 10 to 15 %. However, the industry is optimistic about the future because only state-of-the-art mining technology will be able to ensure the raw materials required for climate protection and digitisation.

The importance of the mining industry in this context and also the machine manufacturers is also highlighted by the Chairman of VDMA Mining, Michael Schulte Strathaus, during the web annual press conference 2020 at the Zollverein Coal Mine Industrial Complex in the city of Essen/Germany. Due to the pandemic nobody was able to predict at this time how 2021 will go but Schulte Strathaus feels certain that incoming orders and sales will develop positively in the future. “We make sure that raw materials can be mined and processed. The mining equipment is becoming increasingly environmentally friendly and making a contribution to climate change, e. g., with alternative drives and lower energy consumption in the mines”, he confirmed.

Production and sales developed very well in 2018 and 2019 for the mining companies in Germany, contrary to expectation new business and therefore incoming orders fell sharply at the end of 2019. There were also trade conflicts, the crisis in the Middle East and Brexit, which overpowered the economic concerns at the end of 2019. At that time if the industry was expecting restrained development with stagnating sales at most, the corona pandemic also put the mining industry under pressure.

In the course of 2020, shaped by the pandemic, the companies managed to once again close the disrupted supply chains and organise production in a Covid-19-compliant manner. Communication with customers abroad was mostly changed to web-based processes. At the end of the summer the industry sent very different signals of almost unmodified sales plans and expectations to a decline in sales of 30 % or more. On the whole, the industry anticipates a decline in sales for 2020 of around 10 to 15 %. Sales will therefore stabilise between 4 and 4.5 bn €.

Some of the biggest export markets include EU countries, the USA, Russia and China. Australia surprised this year and managed to take second place among the individual markets, ahead of China and Russia. With exports of 96 %, the manufacturers in Germany are dependent on international business (Figure 1).

Within the EU mining production has remained stable over the last 20 years. In the summer the EU Commission announced that it wanted to secure Europe’s supply with critical raw materials. For this purpose, the procurement of raw materials in the EU will be intensified.

In the USA Schulte Strathaus believes mining is on the verge of radical changes. “With Joe Biden the country will commit to climate neutrality and large shares of the announced funds of around 2,000 bn US$ can be channelled to the development of clean energy technologies. This brings opportunities for our mining equipment manufacturers in Germany. However, they must make more of an effort to exploit new markets or expand existing sales territories”, says the Chairman.

Following a very successful year in 2019 with exports of around 97 M €, supplies to Australia fell in the first eight months of this year to 68.8 M €. Schulte Strathaus is confident that Australian customers will once again have more interest in mining technology from Germany from 2021 as the reluctance in the development of new supplier relationships can clearly be traced back to the current corona crisis.

Russia is currently a very difficult market due to the sanctions, the political disagreements and the weak ruble. Travel restrictions and the uncertainty that supplies from Germany could be stopped at any time make the business relationships too risky for Russian companies.

In China coal mining is far ahead of the Chinese mining industry. While the country recovers from the corona pandemic, the mining sector achieved sales of around 309 bn € and profits of approximately 30 bn € in the first eight months of 2020. The manufacturers from Germany could not benefit from this. Up to August exports had only reached a value of 67.7 M €, which represents a decline of 45 %. Nevertheless, Schulte Strathaus envisages good opportunities for positive development because China focuses on digitisation and unmanned operation in the mines. This is where mining technology from Germany can be particularly helpful.

Apart from all technology, for the manufacturers of mining equipment the focus is increasingly on the social benefits. “With our machines we guarantee a climate-friendly and secure supply with high-tech raw materials because without this there is no climate change”, confirmed Schulte Strathaus. (VDMA/Si.)

We will have to get used to it. The traditional German miners’ greeting “Glückauf!” will soon be a thing of the past. Mining production will be fully automated in the near future: virtual construction site plans and start-ups, automated work processes, machine-to-machine communications, augmented reality and virtual reality. Digitisation and automation should make our working life easier, make it easier to anticipate faults, make processes more efficient and new drives should make mining operations environmentally friendly. The VDMA Mining Technology Days from 7th to 10th September 2020, which were held as an online conference, provided comprehensive information about the trends and impressions of what the future in mining will look like.

Collecting and evaluating data is a topic that concerns us all, key word: Big Data. But it is not enough to just collect data. Only if you are able to evaluate the data and derive actions and forecasts from it is it of use to the mining companies and the employees on site. There is still a long way to go before mobile machines can operate autonomously and make their own decisions, let alone learn independently. The RWTH Aachen University is currently conducting research in the Advanced Mining Technologies (AMT) Department. The scientists have equipped a mobile device with the corresponding technology so that, e. g., it finds its way through a cave system without natural light, can detect cracks in the rock using infrared thermography and distinguish between coal and surrounding rock by means of acoustic signals. In this test setup it is initially about determining states. Another task is to develop interfaces which forward the results to the machines involved in the work process. Once this technology is fully developed, the miner no longer has to be present in inaccessible locations.

Yet it is not only the effects on the people that play a role in the research, but also the geological conditions in the deposits. The hunger for raw materials has been growing for decades, as a result the best sources have already been exploited and the ore grades are worsening. Irregular geological conditions, decreasing mineralisation and thin layers of deposits are obstacles which mining companies have to overcome. The smaller the companies are, the more difficult this task is. The Institute of Mining and Special Civil Engineering at the Freiberg University of Technology and Mining Academy researches solutions for smaller and medium-sized companies, e. g., at a central mine control station, with a test field for Through-the-Earth communication (TTE). One conclusion is that there is no standard solution for the data transfer, but every mine requires a specific network configuration with small intelligent devices. Depending on the range, the transfer rate and the medium, the scientists have developed a manufacturer-independent SCADA system – MoSC –, which works with .NET Core, a Firebird database, OPC UA and a web-based front end with Angular and Web GL. All elements are flexible, freely accessible and platform-independent. The central mine control station can be extended with M2M communication. The research mine Reiche Zeche works with WLAN optimisation, whereby the signal is supplied to two locations at the same time. The system monitors target-actual values, visualises processes, guarantees a safe environment and utilises the machines better.

Digitisation is also driving the industry with its product developments. Assistance systems and semi- or fully automated machines should guarantee safety, speed, continuity, information and, of course, productivity. Geostatistics alone delivers a continuously up-to-date deposit model with data models recalculated on a daily basis. This saves core drilling and chemical analyses. Radio, automated machines and systems and digital central mine control stations help the operations manager to control the mining. The training and educational profile in mining has now completely changed.

Despite everything, mining remains a “tough” business. The machines need powerful drives, which are environmentally friendly at the same time. The climate targets set standards. Combustion engine out and battery in – unfortunately it is not that simple. Fire and explosion protection, the durability and operational capability of the battery systems, the underground operation site, all these are points that must be considered. One way to not completely get rid of the combustion engine for suitable applications is to combine it with hydrogen, which has been manufactured using renewable energies. The scientists at the Institute of Internal Combustion Engines and Thermodynamics at the Graz University of Technology are researching options (Figure 1). They were able to ascertain that hydrogen concepts have a full load and efficiency potential comparable to the diesel engine with zero CO₂ emissions. The technology is fully developed and affordable. Such engines could mainly be used in distribution vehicles.

Paul Althaus, Chairman of the Research and Technology Steering Group, summarises the VDMA Mining Technology Days as follows: “The companies and research institutes who gave us an insight into their developments over the four days clearly point out that fully digitised mining will soon be a reality. We must fully adapt in our operations and especially in the training of our employees. Then we can all benefit.”

With an export rate of 96 %, mining technology is one of the most export-intensive branches of German mechanical engineering. VDMA Mining represents well-known, mainly medium-sized companies from the areas mining above and below ground, processing technology, as well as consulting, research and development. 145 companies are members of VDMA Mining. They account for over 90 % of the total sales volume.
(VDMA/Si.)

In contrast to the general trend, manufacturers of mining machinery in Germany are expecting 2019 to have been one of the best years on record. The German Engineering Federation (VDMA), Frankfurt am Main/Germany, is anticipating an increase in turnover of 38 % that would amount to around 5 bn €. This revenue should at the very least be maintained in 2020.

In Germany mining machinery manufacturers are expected to increase their turnover by 10 % to 110 M €. As Michael Schulte Strathaus (Figure 1), the chair of the VDMA’s mining division, remarked during the annual press conference at the Zollverein mine in Essen, the decision to phase out power generation from lignite and the declining opportunities to continue the promotion of domestic raw materials has resulted in the domestic market becoming “something of a marginal phenomenon”. He pointed out the increasing difficulty of land-use planning as well as the excess planning of deposits further contributed to the issue. For the year 2020, the VDMA is therefore assuming only slight changes in revenue at most.

In the case of business conducted internationally, however, the outlook is far more satisfying. An increase in revenue of 38 % in 2019 has resulted in a total calculation of approximately 4.9 bn €. Consequently, the export rate amounts to 98 %. For 2020, the sector anticipates that it will at the very least be able to maintain its revenue. According to Schulte Strathaus, detrimental factors have included the trade dispute between the USA and China, a repeated postponement of Brexit and ongoing tensions in the Middle East. In the medium and long term, however, the sector expects that demand will continue to increase. In this regard, the chair referred to calculations from the OECD, according to which the world population will have increased to over 9 bn people by 2050 and demand for resources will have doubled by 2060.

In order to meet the demands of the digital age, mining machinery manufacturers are increasingly counting on machines and systems that can be deployed in the hard-rock mining sector. In the words of Schulte Strathaus: “It is precisely within this area that a number of metals are being obtained for the digital future. Without them – and consequently, without our products too – digitalisation would simply not be possible.” He emphasised that, while data and energy may form the foundation for the future, there would be no energy in the first place without raw materials.

Issues of sustainability and safety are also at the very top of the agenda for companies supplying the mining sector. Particularly when it comes to safety, German companies are “global leaders”, as Schulte Strathaus puts it. He remarked that there was hardly any foreign manufacturer “that can hold a candle to us in this regard”, and that not least for this reason are mining machines that bear the “Made in Germany” quality seal in high demand worldwide.

The chair noted that there was a growing desire within the sector for politicians responsible for this area to make more of an effort to engage with the African continent. Only this way, he claimed, would the sector be able to pit itself against China. Schulte Strathaus also lamented the fact that an increasing number of investors were pulling their funding out of coal projects. He felt that it was not only his sector that was suffering as a result, but also the European machine engineering industry as a whole.

The chair described the skills shortage in his sector as “dramatic”. He believes that skilled tradespeople need to feel that they are integral to society, rather than being ostracised – as he claims is increasingly the case today. He remarked that getting every single student to sit the Abitur, the standard German school leaving qualification to prepare students for university, would not “help us any further”.

In 2019, the largest sales market was the EU. According to a preliminary estimate, the 28 member states accounted for 25 % of exports. This figure amounted to just over 27 % in 2018. France and the UK were the driving forces behind this. For 2020, a further slight increase in exports to EU countries is expected at the very least.

The second largest export country, with an anticipated proportion of 12 % of all exports, is the USA. In 2018, this figure still amounted to 15 %. According to Schulte Strathaus, a shift in the local energy policies is responsible for this. He remarks that the significance of coal as an energy source goes back a long way. However, since the country is making considerable efforts to bolster the mining sector overall, he reckons that there is “cautious optimism” that exports to the USA will at least be able to be maintained in 2020.

The third largest export country is China. The sector has calculated that just over 10 % of exports went to the People’s Republic of China in 2019. In 2018, this figure was just under 10 %. Admittedly, China’s imports of mining technology have been on a downward trend since 2012. Yet this has only had a limited impact on mining technology made in Germany, asserts Schulte Strathaus. However, he categorised the sales development in the medium term as “rather uncertain”, and many suppliers feel increasingly confronted with rather opaque approval procedures for certain machines and systems.

Chinese mining machinery manufacturers have increasingly avoided their domestic market, which is saturated in many areas, and instead intensified competition on international markets. This is apparently not uncommon with state-subsidised dumping prices, which German manufacturers can only counter through the quality of their products and services. For 2020, it is assumed that the export level will at least be able to be maintained.

Other large sales regions include Russia, Australia, the Middle East and Latin America. (VDMA/Si.)

Worldwide demand for mining technology from Germany remains high. In the first half of 2019, orders received rose by 35 % and sales by 40 % in comparison with the previous year. The upward trend in this industry therefore continues. After the difficult period from 2012 to 2017, global business has been picking up for the past two years. In 2018, the approximately 150 companies in the sector achieved sales of approximately 3.5 bn €, of which around 95 % was achieved in other countries. A further increase in sales of approximately 15 % is expected for the current year. “It is difficult to predict future development, however, due to the loss of global political leadership – we will have to take things as they come and react flexibly,” says Michael Schulte Strathaus, managing partner of F. E. Schulte Strathaus GmbH & Co. KG in Werl/Germany and Chairman of the Board of VDMA Mining (Figure 1).

VDMA Mining has launched the “Roadmap 2035” in order to ensure the global competitiveness of German mining technology. In this, the manufacturers in the association discuss future issues and jointly develop solutions for these. They relate, e. g., to the use of data streams, the definition of data interfaces and the topic of data security. Further topics to be covered in the Roadmap 2035 include guaranteeing a very high technical level and innovation leadership. Under these headings, aspects such as performance, availability, ease of maintenance and durability of machinery are discussed, together with the problem-solving capability which can be assured through staff training and expertise. The Roadmap therefore also covers questions of recruitment of young talent, as well as commercial and academic education.

The sector has coped well with the end of the German coal mining industry last year. Companies have used the time between the decision to exit and the closure of the last coal mine in Germany well, and have acquired increased numbers of new customers abroad. This year, the largest individual markets – besides the Eurozone – are the USA, China, Australia and Russia. These countries are also amongst the world’s largest coal producers. In 2018, they produced more than 7 bn t of coal, which they primarily used to supply their own power.

There are also prospects for the sector in the growing demand for raw materials for the energy transition and future technologies. Corresponding investments from mining companies in extraction and processing technologies for lithium, cobalt, tantalum or rare earths and neodymium are reflected in mining machinery manufacturers’ exports.

There is also investment in new mining projects for the extraction of lithium in Germany, primarily in Saxony. The Zinnwald Lithium Project, south of Dresden, is planning to mine 5,100 t/a of lithium and announced in June that a feasibility study had confirmed this plan. In Sadisdorf, also located to the south of Dresden, the Australian mining and technology company Lithium Australia is planning to mine lithium in order to service the growing demand for this raw material in the electromobility sector. (VDMA/Si.)

For German manufacturers of mining equipment, the domestic market now only plays a minor role in their business plans, with a total turnover expected to decline by 22 % to 90 M€ in 2018. According to Michael Schulte Strathaus (Figure 1), Chairman of VDMA Mining, Frankfurt M./Germany, the current policies demonstrate little affinity to the business of raw materials, and therefore mining, and are highly unlikely to provide any impetus for domestic business. Germany’s mining equipment industry is therefore becoming increasingly dependent on foreign business. While Germany’s last hard coal mine has been shut down, Poland is currently expanding the country’s hard coal mining activities in an effort to reduce its dependence on imports. Hardly any impetus is also expected from the potash and salt industry, as Schulte Strathaus emphasized during the association’s annual press conference in November 2018 in Essen/Germany. The sector expects a further decline on the domestic market in 2019, with the best-case that of a stagnating turnover.

According to the forecast by VDMA, export revenues will increase by 13 % to approximately 3 bn €. 25 % of exports are delivered to EU countries, a figure which has declined from the 31 % achieved in 2017. The biggest customers are Italy, Austria, Poland, France and Belgium. As Schulte Strathaus explained, the market is primarily marked by major infrastructure projects which will gradually be completed, and there are currently no adequate replacements in sight. VDMA is therefore expecting stagnant exports to EU countries in 2019, with slight increases at best.

According to calculations by VDMA, the USA’s share of the total export volume will increase from 15 % in 2017 to 17 % in 2018. Schulte Strathaus cited President Trump’s changes to energy policies as one of the reasons for this development. Restrictions have been loosened, an effect which has led to an increased use of hard coal mined in the USA. This has led to considerable demand for machines that can increase productivity, and consequentially, profit. A development which benefits German manufacturers in particular. The industry is expecting a further moderate increase in exports to the USA in the coming year.

German mining equipment manufacturers are also enjoying healthy business with China, with the export share to the country expected to increase from 7 % to almost 10 % in 2018. According to Schulte Strathaus, policymakers in China have realized that establishing high-performance mines can only be realized to a limited extent when only domestic technology is used. German manufacturers provide technologies that are either unavailable in China or only available to a very limited degree, however, China is making considerable efforts to close existing technology gaps. Schulte Strathaus: “We still have an edge when it comes to extraction technology, especially in underground mining. However, we do not know how long we will be able to maintain our lead, or perhaps expand it.” The industry expects that its exports to China will increase further over the coming year. All in all VDMA Mining expect an increase in the turnover of 12 % to nearly 3,1 bn € in 2018, with further growth in 2019.

The future for German mining equipment manufacturers lies outside domestic borders, Schulte Strathaus emphasized. With the support of VDMA, the sector began increasing its activities abroad at an early stage. New markets were the subject of intense exploration and development, and it is therefore no surprise that the sector has an optimistic view of the future. The demand for raw materials will continue to increase. Schulte Strathaus pointed to an assessment by the OECD which found that the demand for raw materials will nearly double by 2060. This will have a positive and sustained impact on business. Increased demand is primarily expected by companies which extract raw materials to be used in the production of alternative energy generation.

German mining equipment manufacturers will increasingly have to deal with demands that society places on raw materials extraction and thus the mine operators as customers of the equipment manufacturers. Schulte Strathaus used the keywords sustainability, green mining and safe and healthy working conditions. Together with VDMA, a roadmap is currently in development, which is intended to support companies in identifying new challenges and reacting to them in line with market requirements and thus successfully. The task is to now filter the decisive parameters from the vast amounts of machine data collected and make it usable for controlling the machines and, ultimately, the entire process. (VDMA/Si.)

Mining machinery manufacturers in Germany have mastered the turnaround. After revenues continued to decline for four consecutive years, the sector is now expecting to break even in 2017.

Based on the figures for the first nine months of the year, the mining equipment manufacturers are expecting to at least repeat their turnover of 2.95 bn € from 2016, as the Chairman of VDMA Mining, Michael Schulte Strathaus (Figure 1), reported. Revenue from foreign markets is expected to grow by 1 % to 2.84 bn €. Revenue from the domestic market is expected to fall by 15 % to 110 m €.

This optimism is based on the increase in incoming orders from abroad since the fourth quarter last year, according to Schulte Strathaus. In the first nine months alone, orders increased by 38 % compared to the previous year. In the sector, it is not unusual that a year or more passes between incoming orders and delivery, which is why turnover is expected to grow in 2018 and 2019. Schulte Strathaus also explained that the companies’ presence on almost all world markets allows them to balance even significant fluctuations. At the moment, 96 % of turnover comes from abroad and about 11,600 staff are employed.

According to Schulte Strathaus, the decrease in domestic business to 110 m € is a byproduct of the “general uncertainty” in the German raw material sector which includes the closing of the last two hard coal mines; lignite is also facing an “uncertain future”. Policymakers’ demand for a quick withdrawal from coal-based electricity places a burden on the sector. Germany operates an energy policy that is fragmented, unpredictable and, from an energy-economy perspective, not always comprehensible. Although there is no ready substitute at hand, the energy supply safeguarded by lignite is being undermined. Schulte Strathaus referred to the statements of experts who have long warned about the incalculable risks for network stability and thus power supply throughout the country. Nonetheless, the sector is hoping to maintain its domestic turnover in the coming year. In the medium and long term, however, results are expected to continue to drop.

The largest export region for mining equipment is the EU. In the first nine months of 2017, approximately 28 % of exports went to EU countries, which is 7 % more than the year before. Conveyor technology, safety systems and accessories, in particular were sold. Business is also going well for tunnel construction. Turnover is expected to remain the same or even grow in 2018. About 15 % of exports went to the second largest country of exportation, the USA. This represents an increase of 5 % compared to the previous year. According to Schulte Strathaus, US President Donald Trump has for the most part upheld his promise of not reducing coal extraction or closing coal mines. And jobs were also preserved. The sector anticipates a further growth in exports to the USA in the year ahead.

Exports to China and Russia also increased. Mining technology “Made in Germany” remains popular in China according to the Chair of the VDMA trade association. The focus remains on high-performance mines. Small, unsafe and inefficient mines need to be closed and replaced by new and larger operations. A backlog was created in Russia that could be partially realized this year. Manufacturers expect their business to improve in both countries. (VDMA/Si.)

Mining machinery manufacturers from Germany are back on track, with incoming orders increasing by 45 % in the first half of the year. Closer cooperation with Australia is set to bring further growth.

Following a sharp decline in turnover in recent years, incoming orders from abroad went up 50 % in the first six months of this year compared to the same period the previous year. While domestic orders slumped by 11 %, the total number of orders in the first half of the year increased by 45 %, says Klaus Stöckmann, Deputy Managing Director of VDMA Mining in Frankfurt/Germany (Figure 1). In light of the increase in raw material prices in many areas, the association expects this positive trend to take hold. For the current year, VDMA forecasts project only a minor increase in turnover. According to Stöckmann, this is due to the relatively long periods of up to one and a half years that can pass between the receipt of an order and the delivery of equipment and systems for raw material extraction – and thus the receipt of payments. “In 2018, turnover will be increasing again as well,” Stöckmann projected.

While strong gains were recorded in exports to the EU and in particular to the USA, exports to formerly important markets such as China and Russia declined. With the export quota climbing from 84 to 92 % (2016) since 2006, the domestic market in Germany is becoming less and less important for manufacturers. Stöckmann cited the phase-out of hard coal production planned for the end of next year as the main reason for this development. The situation with lignite, on the other hand, is quite different. With an annual capacity of about 180 mt, Germany continues to be the largest lignite producer in the world. Furthermore, Germany ranks among the five largest global producers of potash and salt, with around 6 mt of potash and approximately 32 mt of salt.

German manufacturers anticipate additional growth stimuli to come from Australia in particular. In March, both countries signed a Memorandum of Understanding and agreed on strengthening cooperation in the energy and raw materials sectors. The first bilateral talks are scheduled to take place during the Asia-Pacific Regional Conference held in Perth/Australia on 3rd to 5th November 2017. The schedule includes two working groups, comprised of representatives from industry, politics, administration and associations. The meetings are to take place every year. “This dialog will help our industry to continue its success story in Australia,” summarizes Stöckmann.
(VDMA/Si.)

Germany’s mining equipment manufacturers have come out of recession. Following a decline in turnover of approximately 21 % down to 2.8 bn € in 2016, the sector foresees a stabilization of the situation in 2017. In 2018, things should pick up once again.

Looking domestically, a decline in turn-over of 36 % down to 210 m € is anticipated for 2016. Revenue abroad will fall by some 21 % to 2.6 bn € was the estimate given by the president of the Mining Association at German Mechanical Engineering Industry Association (VDMA), Frankfurt Main/Germany, Dr. Michael Schulte Strathaus (Figure 1), at the annual press conference 2016 at the Zeche Zollverein in Essen.

However, mining equipment manufacturers believe that this will bring an end to the days of sometimes two-figure declines in turnover. The reasons are the rising raw material prices and a newly growing willingness to invest in the raw materials industry. The prices have broadly recovered, said Schulte Strathaus. In the third quarter of 2016, the mining equipment manufacturers registered a 12 % increase in incoming orders in comparison to the same period the previous year. The respective index rose over the same period from 61 to 80 points. However, the period from the receipt of an order to its settlement can run up to 15 months, said Schulte Strathaus. The renewed increase in turnover can therefore be anticipated in early 2018. Despite this not exactly simple situation, the companies have succeeded in maintaining a steady workforce size of what is currently 12,000 employees. Changes are not planned.

Schulte Strathaus ascribes the domestic decline in turnover to some 210 m € primarily to missing contracts in the hard coal industry – the last German hard coal mine will be closed in 2018. Germany operates an energy policy that is fragmented, unpredictable and, from an energy-economy perspective, not always comprehensible, Schulte Strathaus noted.

Although there is no ready substitute at hand, the energy supply safeguarded by lignite is being undermined. “A lack of planning and exaggerated campaigning, which set out national environmental requirements which go far beyond European and international agreements, are running the show,” said Schulte Strathaus. The bill for all this ends up being paid for by mechanical engineering companies in the form of fewer contracts, and first and foremost by citizens in the form of rising electricity prices. Costs and benefits in the energy policies run by the German government are “out of reasonable proportions”. What the politicians are missing is a sensible plan. Too much reacting and too little action is taking place. The sector anticipates a further fall in revenue in the domestic market in the year ahead.

The largest export market for German mining equipment manufacturers is the EU. Approximately 20 % of the exports go there. Robust business is being done in particular with the United Kingdom, Italy and France. Demand exists in particular for machinery used in tunnel construction. At a minimum similar turnover is assumed for the coming year. Schulte Strathaus also reported robust business with Turkey. In terms of raw materials, the country is increasingly investing in self-sufficiency in order to reinforce its economic foundations and to reduce its dependence on imports from abroad. This is relevant with respect to energy supply from coal as well as to manufacturing industrial metals.

According to Schulte Strathaus, the second most important turnover region – with a share of 11 % of total exports – is Africa, Northern Africa in particular. Since 2014, exports to this region have almost tripled. The largest markets are Egypt and Algeria. Sales are based first and foremost on machinery and plants related to infrastructure projects. The third largest market is the USA. Approximately 10 % of exports make their way there. Sales are based mainly on processing technology and excavating machinery. Schulte Strathaus expressed doubts as to whether mines will continue to close and coal mining will continuously be reduced under the new President Donald Trump. Trump has not only promised to preserve jobs in this sector, but to even create new ones. The mechanical engineering companies assume that their share of export to the USA will expand in 2017.

Schulte Strathaus considered the increasing diversification in companies to be positive. New products are increasingly brought onto the market and new export regions are also being established. Meanwhile, virtually all the renowned manufacturers are offering machinery for hard rock mining. This is resonating positively among purchasers on the whole. Schulte Strathaus announced a Europe-wide networking of companies. Thus, it should become possible among other things to bring new products onto the market together, with greater impact. (VDMA/Si.)

Brazilian mining is not only an important supply of raw materials for German industry. It also provides German companies with opportunities for investment along the entire value-added chain. This is true not only of collaboration on large-scale projects, but also of projects involving smaller, emerging Brazilian mining companies. However, the country must make a great deal more effort to improve the quality of its technicians’ and skilled workers’ training, said the President of the Verband Deutscher Maschinen- und Anlagenbau (VDMA – German Engineering Federation), Dr. Reinhold Festge, at the first German-Brazilian mining conference, which took place on 9th and 10th August in Belo Horizonte in the state of Minas Gerais (Figure 1). According to Festge, Brazil must start to view itself as an exporting country.

Antônio Castello Branco, Director of the Society for the Economic Development of the State of Minas Gerais (CODEMIG), emphasised the great lengths to which his state has gone to process the raw materials available there in a complex value-added chain. Against this backdrop, he also called on German suppliers and industrial partners to endorse the CODEMIG’s projects. He believes that this would be effective with regard to the development of a value-added chain around permanent magnets in particular, which play a significant role in producing electricity from wind turbines, among others. The CODEMIG operates its own mines, in which the underlying raw materials (rare earths) are obtained.

The Brazilian mining industry is diverse. Almost 8,900 companies including those in the quarrying sector are registered in the industry. The 1,233 medium-sized companies alone produce between 100,000 and 1 mt of material annually. The project portfolio is not limited to classic iron ore exports. It also includes gold, bauxite, phosphate, manganese, copper, diamond, lead, rare earths and zinc.

Rolf Fuchs, founder of consultancy firm integratio based in Belo Horizonte, is of the view that it is high time small- and medium-sized mining companies were looked after. Although their orders may not have the scale of larger projects, they do develop demand for technological investment.

Sven-Uwe Schulz from the German Mineral Resources Agency (DERA) at the Federal Institute for Geosciences and Raw Materials (BGR) highlighted the demand in German industry, which is largely dependent on raw material imports. In 2015, Germany imported raw materials to the value of 2.13 bn € from Brazil alone. This included iron ore (1.35 bn €), copper, graphite, precious stones, niobium, magnesite, tin and manganese. As a result, there is potential for Brazilian suppliers to expand their share of German imports of raw materials and primary products.

German Ambassador Dirk Brengelmann emphasised that German interest in Brazil should not be limited to the traditional site of investment, São Paulo. He expressed the hope that the Mining and Raw Materials Conference would take place in Belo Horizonte regularly in future, perhaps even as part of a bilateral framework agreement. Thomas Timm, Managing Director of the Chamber of Industry and Commerce (AHK) in São Paulo, was equally optimistic: “Now is the perfect time to discuss future projects.”

Overall, the 130 conference participants confirmed the considerable need for an intensive exchange of information and experience between Brazil and Germany. The next German-Brazilian mining conference is due to take place in the coming year in Belo Horizonte once again. (VDMA/Si.)