Komatsu and Joy come together in new one stop shop mining OEM

The biggest move in mining equipment supply consolidation since Cat bought Bucyrus was announced this week, as Joy Global Inc, the global supplier of high-productivity mining solutions, announced that its Board of Directors had unanimously approved a definitive merger agreement under which Komatsu America Corp, a subsidiary of Komatsu Ltd, will acquire Joy Global in a transaction valued at approximately $3.7 billion, including Joy Global’s outstanding indebtedness. Back in 2012, International Mining commented on rumours circulating even then of Komatsu interest in Joy Global: http://im-mining.com/2012/07/12/rumour-mill-of-komatsu-interest-in-joy-global-rumbles-on. At the time, Bloomberg reported the then Komatsu CEO, Kunio Noji, as stating there were not enough synergies to proceed.

A lot has happened since then. A tie-up between Komatsu and GE on underground equipment development followed: http://im-mining.com/2014/01/30/komatsu-and-ge-join-forces-to-develop-next-generation-underground-mining-equipment. The statement then said: “By combining their expertise in mining equipment and propulsion systems, the companies will help meet the needs of customers and partners worldwide, with an initial focus on developing solutions to increase customer productivity and safety for underground mines.” This in turn was followed the same year by Joy acquiring MTI’s underground mining business, which it has been working hard on integrating and updating ever since: http://im-mining.com/2014/04/16/joy-global-acquires-certain-assets-of-mining-technologies-international. Joy at the time took on “all of the assets associated with MTI’s hard rock drilling, loaders, dump trucks, shaft sinking, and raise bore product lines.”

The Komatsu buyout of Joy Global brings together a lot of key mining equipment. On the surface on Komatsu’s side it includes its electric drive mining trucks (up to the new 980E 365 t model just being rolled out to test sites at Suncor and at Antamina) and its pioneering Autonomous Haulage System for trucks; its highly successful hydraulic excavator line up to the 42 m3 bucket, 800 t PC8000; and then its wheel loaders up to the WA1200 with 20 m3 bucket. Joy Global’s brings its P&H rope shovels up to the 122.7 t capacity 4800XPC and new hybrid 2650CX; its own wheel loaders equipped with SR Hybrid Drives up to the 72.6 t capacity L-2350; as well as its dragline offering and High Angle Conveyor (HAC) solutions as well as its range of potential IPCC solutions.

Underground it opens up that whole market for Komatsu; which will now have an offering for its surface mining customers planning to move to underground operations. Joy’s range includes LHDs from 0.7 to 10 t and truck options from 6.4 to 31.8 t. Unlike Caterpillar, Joy also has an underground development drilling range with six models of jumbo (both one and two boom), as well as two ITH production drills. It also gives Komatsu an entry into continuous hard rock mining, with Joy’s DynaCut offering with Oscillating Disc Cutting (ODC) technology preparing to start full trials in Australia with a proof-of-concept underground trial having already been completed at the Bathopele mine of Anglo American Platinum. Last but by no means least are the soft rock and coal longwall systems and room and pillar mining offerings that Joy is best known for, with associated offerings like the Flexible Conveyor Train (FCT).

It is unclear how the merger will affect the GE relationship with Komatsu on underground equipment given that GE is going down its own hard rock underground mining equipment path with models such as the 7T LHD. That said, GE and Komatsu will continue to work as close partners on surface trucks, where GE AC drives are used across the board…