Caterpillar, which bought mining equipment manufacturer Bucyrus last year, expects the global capital equipment market to remain strong, with further growth expected in the long term, outgoing GM for Southern Africa Fernando Armas tells Mining Weekly.

Despite tough conditions worldwide, economic recovery, the demand for commodities and commodity prices, particularly from developing economies, will continue to drive the growth of the industry, he explains.

Even in the US, where economic recovery continues to be weaker than expected, Caterpillar CEO and chairperson Doug Oberhelman forecasts continued moderate economic expansion. “This, coupled with stronger growth in the developing world, is driving higher sales for Caterpillar.

“We anticipate that demand for commodities will increase in the second half, keeping prices high enough to encourage producers to expand production and capital investments. We expect major mining companies will increase capital spending more than 50% in 2011,” Oberhelman says.

Caterpillar has raised its 2011 outlook for both sales and revenues. It expects profit, excluding the $8.8-billion Bucyrus acquisition, to be between $54-billion and $56-billion. The company expects Bucyrus to add $2-billion in sales this year. Including Bucyrus, 2011 sales and revenues are expected to be between $56- billion and $58-billion.

In fact, growth is highly visible in Africa, Armas says, where Caterpillar believes there are many opportunities to exploit and grow the company.

Such opportunities include the delivery of the largest electric rope shovel to Southern Africa, at Debswana’s Cut 8 project, at the Jwaneng diamond mine, in Botswana.

Some 20 m in height and weighing 1 382 t, the Caterpillar 7495 (previously the Bucyrus 495HR2) shovel boasts a payload of 110 t, which, says Caterpillar, is 50% larger than the largest rope shovel currently operating in Africa.

The electric rope shovel is so large that transportation to the mine involved about 40 truckloads and six rail cars.

“Jwaneng’s electric rope shovels are believed to be the first new rope shovels employed in Southern Africa in ten years and the first ever to sport alternating current electrics,” the company says.

In fact, millions of dollars are invested in the research and development for the operator cab of the rope shovel, Bucyrus VP for product line Wayne Chmiel says.

Further, a team of experts will continue to be involved in the training of local mine personnel to provide technical support.

Such a machine, says Debswana-Jwaneng GM Balisi Bonyongo, remains key to achieving efficiency at the mine and keeping operating costs low.

Debswana will take delivery of two more Caterpillar 7495s. Caterpillar has identified potential markets for such machines in Mozambique, Mali, Namibia and Zambia, and has 25 of these electric rope shovels operating in countries in South America.

Bonyongo says the electric rope shovel will impact positively on operations, and, therefore, on the economy, particularly in improving the lives of the local communities.

Students from seven schools in Jwaneng received 3 000 lapdesks, taking the lapdesks handed out by Caterpillar in Southern Africa to some 4 500.

Further, the company is investing in a three-year programme to take dental care through a mobile dental clinic to remote communities in close proximity to mining operations – some 80% of primary school children in rural South Africa do not have access to a dentist, business process analyst responsible for sustainable development projects Ansie Meyer says.

Caterpillar hopes to reach 2 012 primary school children before the end of 2011.

Communities in Botswana, Mozambique and Namibia will also benefit from the programme during the three years.

Bonyongo tells Mining Weekly that the project has remained on schedule to meet all targets.

De Beers and the Botswana government own Debswana jointly and would each be investing half of the R25-billion, over the next 14 years, in the mine.

Cut 8 will deepen the Jwaneng pit from the current 330 m to 625 m, and could well be followed by Cut 9, on which a feasibility study points to a positive opencast outcome.

Cut 9 may, however, be Jwaneng’s last opencast extension before the miner reverts to under- ground mining. Construction and the setting up of workshops and service bays will be completed by year-end, Bonyongo says.

http://www.miningweekly.com/article/capital-equipment-market-remains-strong-caterpillar-2011-08-05