A Mine of Opportunities

An overhaul in mining policy promises to increase yields for equipment providers and organised companies, finds CHARU BAHRI.

Of all mining equipment globally, surface mining equipment enjoyed the highest market share, around 31 per cent, in 2015. Mineral processing equipment, underground mining equipment, mining drills and breakers, crushing, pulverising and screening equipment, and other mining equipment lagged behind.

In India, surface mining equipment inclusive of trucks enjoys 30 per cent of the market; sans trucks surface mining enjoys 20-22 per cent of the market, says Rakesh Choubey, Head, Marketing & Business Development, Belaz-Enrika Mining Equipments Services. But it is not the fastest-growing mining equipment.

¨In 2015, surface mining had a share of 45 per cent of our business which spans equipment, consumables and spares/service,¨ said Sanjay Ahuja, General Manager, Mining and Rock Excavation Technique, Atlas Copco (India) Ltd.

Growing rapidly
Between 2016 and 2020, mining drills and breakers are projected to be the fastest-growing mining equipment segment globally because of their increasing application in metal mining. In India as well, metal mining, in particular, new iron ore blocks and the resumption of mining in Karnataka and Orissa will grow the surface drills business, opines Anil Martyris, Business Head for Surface Drills, Sandvik India. However, in India, mining drills and breakers will see a boost from other segments too. ¨Big private-sector cement players expanding capacity in preparation for the envisaged increase in demand from upcoming infrastructure projects and Smart Cities, and the dimension stone and aggregate sectors catering to road projects are increasing demand for surface drills,¨ he adds. ¨Steady demand for rotary drill rigs for coal mining will continue in the next five years.¨

The request from the Ministry of Mines and Steel to mining companies to allocate a tenth of their profits to exploration projects to boost mining in the country is likely to increase demand for exploration drills for core drilling, says Martyris.

Coal mining faces price glitches
Coal India´s ambitious plans to double production over the next five to six years were expected to give coal mining a mega boost but so far things are progressing slower than anticipated. ¨Production by Coal India is growing at 6-7 per cent as against the 9-10 per cent envisaged in the first two years,¨ says Shib Bhowmik, Country Head & Managing Director, Joy Global India, who is sceptical about the prospects for demand.

¨Globally, after five years of decline, coal prices have rallied substantially since January 2016, mostly as a result of China curtailing domestic production and sourcing from the global market,¨ he adds. ¨In India, landed coal prices have risen by 20-25 per cent but unless prices rise by another 20-25 per cent, mining will still not be remunerative for companies having aggressively bid for the 34 coal blocks that have been auctioned.¨

In fact, Bhowmik believes players who were awarded projects as a result of those aggressive bids may find it cheaper to import coal, even with the fine tagged on for not producing, given that low coal prices are about half of the highs of 2008. Additionally, India´s ratification of the Paris climate change agreement does not bode well for the future of coal mining, he says. ¨So a lot hinges on India´s GDP growth; high growth may boost demand.¨

Scope for equipment grows
Some developments in the coal segment do bode well. ¨Now, the shift towards the Mine Developer Operator (MDO) concept will boost the uptake of mining equipment because it is mandated in the terms of the concession agreement, at most, after a grace period of a year or two,¨ says Balakoti Reddy, Vice-President, BGR Mining & Infra Pvt Ltd. ¨Opportunities will arise for 100-tonne dumper trucks, 10-12 cu m bucket capacity shovels/excavators and surface miners. We will not invest in too many models as that causes standardisation and storage challenges.¨

Coal India is continuing to invest in equipment for its surface open-cast mines as well as underground mines, says Martyris. Coal India is prioritising advanced mass production underground mining technology, like long wall systems and continuous miners for room and pillar mining, says Bhowmik. Joy Global offers both these solutions, which increase safety by reducing the man-machine interface.

Growing concern for quality, the environment and better utilisation of surface lands in open-cast projects is spurring the use of surface miners, points out Choubey. This is, in turn, reducing the need for drills, breakers, excavators and large-size hauling trucks.

Deterrents
So far, outsourcing contractors engaged in overburden removal in coal mining have typically deployed construction equipment, essentially because they have aggressively bid for contracts and need to limit investments, observes Reddy.

Additionally, Coal India´s policy to award short to medium-term overburden removal contracts, say for three to five-year durations, probably because of its own land acquisition issues, deters subcontractors from investing in better technology and capital-intensive machines, says Bhowmik. ¨Many such contractors tend to use depreciated construction equipment.¨

Another dissuading fact is that most surface mines in India are patch workings; that is, low-capacity surface mining projects, observes Choubey. Interestingly, however, the preference of contractors for less capital-intensive machineries with alternative uses, like in construction projects, has substantially grown the population of tipping trucks and excavators of 1 to 3 cu m capacity, he adds.

Logistical pains
A strong transportation network is essential to the success of India´s coal mining industry, not least because of the requirement to move mined coal almost immediately after removal from the ground to ensure optimal quality, observes Krishnan, who is confident that resources are in place to ensure improvements in rail and road networks. The ultimate goal is obviously to eliminate transport infrastructure problems in the remote parts of the eastern states where much of India´s coal is to be found.

Rail connectivity was in place for underground coal mines producing as little as 100 tonne per day, says Choubey. ¨That type of holistic planning of transportation links and proper logistics infrastructure is required for all adequate evacuation from all volume-eccentric projects and coal mines, which is currently a constraint.¨

And according to Martyris, at present, ¨infrastructure and approach roads to remote mine sites as well as basic facilities at these remote sites – proper camps, clean water and boarding facilities – remain a critical challenge for mining companies.¨

Iron ore mining opportunities
Decisions to invest in equipment are based on mining conditions, reserve, capital investment capacity, etc. ¨Mining ore companies typically invest in bucket-wheel excavators, excavators, rigid-body rear dumpers, crawler dozers, loaders, RBH and DTH drills,¨ says Choubey. ¨They also use iron ore processing machines like conveyor systems, crushers and magnetic separators.¨

Companies engaged in iron ore mining have been investing in high-productive hydraulic top hammer drills for bench drilling as well as crushing and screening plants and screens, according to Martyris.

And Krishnan tells us, ¨Companies engaged in iron ore mining typically favour Volvo´s EC480D and EC380D excavators, which have bucket capacities of 3.1 cu m and 2.3 cu m, respectively, and we´ve also been seeing rising demand for the EC350D, which has a maximum bucket capacity of 2 cu m.

All three deliver higher productivity, greater reliability and easier usage through their inclusion of a more comfortable operating environment.¨ Bhowmik is of the opinion that considerable idle mechanisation capacity in the iron ore mining segment and India´s overall small and scattered iron ore mines are keeping demand for equipment low and prompting some players to use construction equipment on site.

(A longer version of this article first appeared in Construction World´s November 2016 issue)