Yancoal Australia is aggressively targeting organic growth opportunities to build on a rapid turnaround in company performance that led to a record 2018.
The company has highlighted a continuation of demand for its high efficiency thermal coal after posting several production records last year.
Yancoal stated that the power industry’s ongoing focus on improving thermal efficiency in generators would drive demand for the high-quality, low ash thermal coal product in which the company specialises.
Key Asian coal markets such as China and Japan have made a push towards high-efficiency, low emissions (HELE) thermal coal in order to help meet environmental targets.
Yancoal chief executive officer Reinhold Schmidt said the company would invest in new fleets and operational efficiencies across its open cut mines, while progressing a pipeline of Australian brownfield projects, with focus on the Mount Thorley Warkworth and Moolarben operations in New South Wales.
“With three of the most successful low-cost, high-quality producing Tier 1 assets in Australia, we are aggressively pursuing new organic growth opportunities to sustain the profitable return of Yancoal,” Schmidt said.
“Coal remains a critical part of global baseload energy supply and we are well positioned to maximise returns from current market conditions by meeting increasing needs for high quality coal supply.”
Chinese customs reforms this month have resulted in a fall in Australian coal prices, however. Customs clearing times at some Chinese ports have doubled to at least 40 days, according to a report from Reuters.
An official at Dalian Port Group told the news agency that the port was capping coal imports at 12 million tonnes for 2019. Five harbours within Dalian are no longer clearing Australian coal through customs, though coal from Russia and Indonesia is still allowed, the official said.
Despite this market volatility, Yancoal has raised its saleable production guidance for 2019 to 35 million tonnes, 2.1 million tonnes higher than its 2018 record.
The company’s attributable production in 2018 was 32.9 million tonnes, 27.7 million tonnes of which was thermal coal. This figure was nearly 78 per cent higher than the 18.5 million tonnes recorded in 2017.
Correspondingly, the company also achieved a record for its operating earnings before interest, tax, depreciation and amortisation (EBITDA) at $2.18 billion, a 121 per cent year-on-year increase. Yancoal secured a hat-trick third record, net profit after tax, which stood at $852 million (compared to $229 million in 2017).
Yancoal also announced a $377 million final dividend for shareholders (28.5 cents per share), another record for the company.
The National Group ( Headoffice: Level 3, 68 Marine Parade, Southport BC, QLD 4215 ) has closed out a record breaking 2018 and started 2019 off with a bang by delivering a pair of brand new excavators into Queensland’s Bowen Basin.
The first of these excavators, a Hitachi EX5600, was added to BHP Billiton Mitsubishi Alliance’s (BMA) Peak Downs site where the National Group handed over five Liebherr ultra-class T 282C trucks in September 2018.
The second excavator, a Liebherr R 996B, was delivered to its sister mine Poitrel, part of BHP’s other Queensland joint venture, BHP Mitsui Coal (BMC).
The excavator is the first piece of equipment that National Group has at the coal mine. Founder and managing director of the National Group, Mark Ackroyd, was there in person to hand over the keys at both locations and was very pleased to further contribute to its already strong relationship established with BHP.
“We have been working with BHP for some time now, especially at Peak Downs, so to be adding more equipment there is a testament to the machines we currently have operating for them and speaks volumes of our team onsite who do a great job with maintenance when needed,” he says.
“[At] Poitrel on the other hand, we are very excited to be adding our first piece of equipment there and for it to be the ever-reliable Liebherr 996 digger. We’re confident they are going to love this machine and hope it is just the beginning of things to come,” says Ackroyd.
Bringing such big equipment down under is a very complex process and one that requires a lot of aspects to go right, which is where National Group differentiates itself from most. It has the capabilities to handle all transport, assembly and delivery, giving their customers peace of mind when securing these long-term rentals.
“We know how difficult it can be to get the bigger gear to Australia first of all, let alone having to worry about everything else once it arrives here. That is why we have worked very hard to build brands that complement each other in the entire journey of port-to-pit,” Ackroyd explains.
National Group is coming off one of its best years to date. However, it shows no signs of slowing down in 2019 with future plans already to invest in technology and enter the automation space.
“The mining industry is now following the technology trend around the world and automation is at the forefront of this, says Ackroyd. “It is all about finding different ways to help your customers succeed and embracing innovation to get that edge over competitors.”
Liebherr is ready to strengthen the reputation of the R 9100/R 9150 excavators when its B versions of the machines arrive at Australian mines this year.
As the R 9100 has proved to be a worthy successor to the R 984 C excavators over the past seven years, Liebherr is convinced the B versions will add further benefits.
Liebherr delivered widespread improvements on the R 984 C with the R 9100 and R 9150, and set similar expectations during development of the new models.
The original versions have, however, provided a strong foundation for Liebherr to build on.
Liebherr launched the R 9100 in 2010 and the R 9150 two years later. Since 2012, the OEM has sold machines for operation in 21 countries over six continents.
The excavators have operated for more than one million hours at the mines, with a third of the machines recording more than 15,000 hours each.
They are used across operations for numerous commodities, including gold, coal, iron ore, copper, nickel and manganese.
Australian miners and contractors are amongst the users of the machines, including Blue Cap Mining, which operates two R 9150 excavators at gold sites in Western Australia and Queensland.
Blue Cap general manager Paul Allen says the R 9150 has many notable qualities that have made it suitable for the small hard rock operations where they are in use.
“We have seen both excavators perform well at different sites with different challenges,” Allen tells Australian Mining.
“Part of the reason we went for the 9150 was the specification and capacity of the machine, its hydraulic system and the additional power you are pulling in that unit – it has 565kW.”
Blue Cap pairs the excavators with haul trucks in the 100-tonne class, a match that been a strong fit for the designs of the pits at the gold sites.
Another key factor that helped the R 9150 stand out for Blue Cap was the technology Liebherr included on the machines, Allen continues.
“It was (at the time) more about some of the newer technology that Liebherr embedded around productivity and fuel efficiency,” he says.
“We are seeing around 15-20 per cent more efficiency out of this digger compared to some competition.”
With the success of Blue Cap’s R 9150 excavators, Allen has taken a keen interest in the updates incorporated on Liebherr’s updated models.
The B-version excavators were launched in January and the first machine in Australia will be received this month.
Liebherr senior product manager – mining excavators George Barturen backs the new excavators to drive productivity at mining operations, whatever the environment.
“Such systems are robustly designed and will be very well suited to the Australian mining environment from our extensive experience over the last five decades,” Barturen says.
“The B series machines, as was the R 9100 are suited to all mining and quarrying operators as the machine brings a competitive advantage regardless of the mined commodity with a reduced cost per tonne.”
Blue Cap’s R 9150 at the Red Dog site. image: Blue Cap Mining.
Stepping up operations
Liebherr’s updated hydraulic excavators have been developed to provide a step forward in performance and reliability, while lowering the cost per tonne.
Both models have received upgrades across the machine, including the latest generation of Liebherr’s D9512 engine, which offers an increased lifetime target of 15,000 hours, and other features that support maintenance efficiency.
The B versions include the exclusive EVO Bucket Solution, maximising loading capacity and ensuring optimal penetration efficiency.
With contoured sidewalls and augmented depth, the EVO Bucket has a 7.5m3 capacity on the R 9100 B and 8.8m3 and 9.6m3 on the R 9150 B, the latter being available on machines configured with a shorter boom.
The buckets match the excavators with the Liebherr T 236 truck, as well as other articulated and rigid trucks in the 50–100-tonne class.
Liebherr has positioned the R 9150 B directly between the 100-tonne and 200-tonne class machines with its bucket capacities. The R 9150 B begins to challenge the productivity of larger machines in the 200-tonne class with 12m3 buckets.
Barturen says incorporating the patented EVO Bucket design to the new machines is the most significant advance that increases productivity.
“This has brought about an increase in bucket payload with a reduction in bucket weight, whilst maintaining the same fast cycle time,” Barturen says.
“Additionally, the EVO Bucket for backhoe machines Liebherr is introducing several patented innovations together with machine functional control systems to provide the operator with semi-automatic functions increasing the overall efficiency and productivity of both machines.”
Barturen, a Liebherr employee since 1991, has worked closely with the company’s mining excavator team on the development of the B versions.
Alongside fellow Liebherr product manager Michel Runser, Barturen has guided the excavators through their final stages of development before launch.
“The main drivers in the development process were to improve the machine as a whole, enhancing machine safety, improving reliability and productivity KPIs and introduce operator comfort options, both active and passive.” Barturen says.
“The Australian mining industry drives continuous improvement of the machines through the different standards, guidelines and mining industry associations.
“Additionally, Liebherr has an internal global reporting system, which brings feedback directly into the factory from the field, speeding up the implementation and introduction of suggested improvements to suit the market, which is continuously driving improvement.”
Updated Liebherr engine
This series of Liebherr excavator was the first to introduce the OEM’s own diesel engines, a milestone reflected in the B versions. The R 9100 B and R 9150 B are equipped with Liebherr’s latest D9512 V12 diesel engine, which exists in Tier 2 and USA/EPA Tier 4 final version.
Liebherr Australia executive general manager, customer service, Tony Johnstone says the company’s service team has updated its skillset to support the new engine since its introduction.
Johnstone believes this has led to a new approach for the team, which has previously serviced and maintained engines from other OEMs.
“For us the challenge has been the development of our service technicians to be ready to work on the machines, understand the systems and be able to provide the best services that are required for customers,” Johnstone says.
“We’ve also had the challenge of upskilling our technical trainers so that we could train all of our service technicians in the Liebherr engine.”
Liebherr’s Australian-based technicians completed training on the engines in the company’s Switzerland engine factory certified training centre, with focus on control systems, maintenance and diagnostics.
In addition, customer training will be provided by Liebherr certified trainers at the new technical training centre at the Para Hills West facility in Adelaide.
The company has also ensured it has widespread availability of the unique service and maintenance parts for the engine.
“We had to stock appropriately for parts and for the future which we are working on now; we are enabling our remanufacturing centre to rebuild and run the D95 series engine,” Johnstone says.
“It has been a ground up approach because it was the first Liebherr engine in a Liebherr mining excavator.”
Liebherr’s preparation for the change of engine has the services team well placed to support the B versions once they arrive in Australia.
The R 9150 B will also be available in electric drive.
The updated features of the B version machines. Image: Liebherr.
Comfort and safety first
The B-version machines feature an upper structure that is accessible via a robust fixed ladder or 45-degree access stair in option. It integrates one large central platform equipped with slip resistant surfaces.
Liebherr has designed the new arrangement with wide catwalks to facilitate maintenance and to ensure comfort during operations.
“Included in the upgrade was the integration of hard safety systems – an improved catwalk on the left side of the machine, together with a handrail installation on the counterweight for added safety during machine and engine maintenance tasks,” Barturen says.
“Integration of HEPA filtration of the operator cabin is available should the requirement be needed.”
The cab, updated with improved ergonomics and operator attenuation, provides the ideal working platform and optimal comfort for operators.
Liebherr’s resiliently mounted cabin on ISO mounts reduces vibration, while a new cabin interior liner provides a two decibel decrease in noise levels in the cabin for the operator.
Technology advances
Liebherr has shown its awareness of modern connectivity needs, equipping the B version machines with GSM data transmission, together with the ability to transmit on customer site networks to provide operating parameters, error codes and machine faults.
Machine end users can access the data through the Liebherr Mining Data (LMD) platform, and generate custom reports to track and analyse machine data.
Barturen says the excavator product team focused on Liebherr’s six pillars of mining: safety and environment, productivity, efficiency, reliability, customer service, safety, and environment when enhancing the machines with technology.
“Improvements to the machines’ operating systems provides enhanced machine operational efficiency. Together with the integration of machine data management and analytics, the B series will enable customers to increase the effective utilisation of the machine in lowering the cost per tonne,” Barturen says.
“Customer service is enhanced by on board systems for the management of the machines’ maintenance and reliability interfacing with the Liebherr developed Troubleshoot Advisor.”
The data collected by the connectivity kit is recorded in a worldwide database for processing and assessment by Liebherr.
NRW Holdings head Jules Pemberton says the company has received “positive engagements” from clients following its acquisition of two RCR Tomlinson companies.
The contractor, which today reported it had finalised the deal, announced last month that it was purchasing RCR Mining and RCR Heat Treatment for $10 million as part of RCR Tomlinson’s ongoing selloff after entering administration last year.
Despite RCR’s financial failure, Pemberton noted that its purchase had received a positive response from NRW’s clients due to RCR Mining’s reputation as a “leading original equipment manufacturer.”
“This acquisition delivers a complementary business to NRW and aligns with NRW’s strategy to broaden the service offering to Tier 1 clients at a time of improving market sentiment,” Pemberton said.
“[Our clients] recognise the quality of the RCR Mining Technologies business and its people, together with the benefits the combination with NRW brings to their project objectives.”
RCR’s mining and heat treatment businesses’ locations in Welshpool and Bunbury, Western Australia, in addition to a facility in Victoria, have all been kept in the buyout, and around 300 staff have received employment offers with NRW.
Other administrative sales of RCR Tomlinson businesses so far include EGL’s purchase of the company’s energy division for $3 million and John Holland’s purchase of RCR O’Donnell Griffin’s rail business for an undetermined price.
BHP’s growth aspirations to significantly increase copper output at Olympic Dam have been recognised by the South Australian Government with major development status.
The miner hopes to expand Olympic Dam’s copper production by 75 per cent, from 200,000 tonnes per annum to 350,000 tonnes per annum.
BHP is progressing its growth studies for the expansion and will seek board approval for a capital project in mid-to-late 2020.
The South Australian declaration is, however, an important milestone for BHP as it considers an investment potentially as high as $3 billion for the project.
It is the first step in a state and federal process that includes assessment of potential social, economic and environmental impacts associated with an increase in mining and production at the site.
Olympic Dam asset president Laura Tyler said BHP was aiming to achieve stable operations and sustainable growth at the mine through a staged and capital-efficient approach over the long term.
“Olympic Dam is a world-class resource with the potential to deliver value to BHP and South Australia for many decades to come, especially given our positive outlook for global copper demand,” Tyler said.
“We are pleased the South Australian Government has declared Olympic Dam’s growth plans a major development, recognising our significance to the state.
“Our team continues to refine the scope for targeted underground development in the Southern Mine Area, strategic investment surface processing facilities, new technology and supporting infrastructure.”
The proposed expansion of Olympic Dam would be the latest in a series of projects for BHP at the site in recent years.
BHP invested more than $600 million into the copper operations during the 2018 financial year, with focus on underground infrastructure and above ground processing operations.
South Australian Minister for Energy and Mining Dan van Holst Pellekaan said the latest $3 billion expansion proposal could potentially create up to 1800 construction jobs with an additional 600 ongoing positions in operational roles.
“Olympic Dam is already the state’s largest mining operation, providing jobs, investment and royalties for South Australia,” he said.
BHP produced 65,000 tonnes of copper at Olympic Dam in the December half year, a 20 per cent increase on the previous period when a smelter maintenance campaign took place.
Fenner Dunlop has secured a permanent contract with Rio Tinto to provide conveyor maintenance services at the Cape Lambert and Dampier Ports in Western Australia.
The long-term agreement is expected to create more than 40 full-time jobs. It will see Fenner Dunlop service all of the conveyors at the Pilbara ports.
Rio Tinto’s port facilities include four independent shipping terminals at Cape Lambert and Dampier, which are managed by a single system. The terminals have a combined 360Mt/y capacity.
Fenner Dunlop plans to open a new company branch in Karratha to form stronger business ties with the region.
Steve Abbott, Fenner Dunlop chief operating officer, said the two companies viewed the contract as a longstanding partnership.
“The award of this contract is directly attributed to our focus on total conveyor performance, our leadership and training programs and the excellent team we have in Western Australia,” Abbott said.
Fenner Dunlop, now part of the Michelin Group of Companies, has manufacturing plants in Melbourne, Sydney and Perth, and 16 branches nationally.
Global contractor CIMIC has used improving market conditions in mining and minerals processing to help increase its 2017 profits by 21 per cent.
The diversified company’s mining and minerals processing divisions — Thiess and Sedgman — achieved growth last year, CIMIC reported, securing contracts and extensions in Australia and Indonesia, including an extension at the Fortescue Metals Group’s Solomon Hub iron ore operation in the Pilbara of Western Australia.
This performance in mining and minerals processing helped CIMIC deliver $702 million in profits for the year, which was just above its $640–700 million guidance.
CIMIC also strengthened its position in the construction industry with several new contracts, both in Australia and internationally.
Michael Wright, CIMIC chief executive officer, said the company leveraged its competitive position and favourable market conditions to produce the operating performance and further diversify an order book across mining, construction, services and public private partnerships.
“We increased our focus on the development of our people during the year, and will further this in 2018 to ensure our performance-based culture provides long-term, rewarding career for our people,” Wright said.
CIMIC secured $18.4 billion worth of new work in 2017, including the $650 million contract extension at the Solomon Hub.
Also in mining, the BHP Mitsubishi Alliance (BMA) awarded Thiess two contracts worth a combined $440 million at the Caval Ridge and Peak Downs coal mines in the Bowen Basin of Queensland.
Thiess was also awarded a $189 million contract extension to continue to operate the Jellinbah Plains open pit at the Jellinbah East coal mine in central Queensland.
Sedgman’s contract wins included a $107 million EPC contract at Heron Resources’ Woodlawn zinc-copper project in New South wales, a $6 million EPC contract with Stanwell Corp at the Meandu mine coal handling and preparation plant in Queensland, and contracts worth a combined $100 million at QCoal Group’s Byerwen coal mine in Queensland.
Investor Elliott Management has again suggested that BHP should review its dual-listed structure and reorganise as a single company in Australia to add over $22 billion in value for shareholders.
It is a view that the company’s chief executive officer Andrew Mackenzie has disagreed with in the past. The CEO said late last year that costs would probably outweigh the benefits, and estimated a cost of $1.3 billion.
According to Elliott’s report, however, which was created under commission by FTI Consulting, reorganising BHP’s head operations into a single Australian entity would cost only $391 million.
BHP’s dual-listed structure, a result of the 2001 merger between the Australian half of BHP and the UK half of Billiton, means BHP Billiton as a whole has two HQs (Melbourne and London) and two market listings, but a single management and board.
FTI’s study stated that restructuring into single listing could result in a $14.1 billion increase in market valuation and a return of $8.7 billion through improved tax credit efficiency.
Komatsu’s Australian subsidiary has acquired MineWare, a mining equipment solutions provider based in Queensland.
MineWare provides systems for loading equipment such as draglines as well as rope and hydraulic shovels in mines, enhancing their payloads and visualising excavating positions.
It also has an advanced technology portfolio to improve the loading process, which boosts productivity on mining operations.
Komatsu automates mining equipment using Information and Communication Technology (ICT) and enhances worker safety and productivity through connecting jobsite data on open platforms.
With the acquisition, Komatsu can implement MineWare’s solutions into its equipment to help operators optimise their mining operations.
MineWare CEO Andrew Jessett said, “With several potential partnership opportunities in the last year, what appealed about Komatsu was the ability for MineWare to remain a highly independent entity.”
“Komatsu is the right partner to support MineWare’s next level of growth, giving us the ability to expand our global footprint quickly into new markets.”
The report, which was produced by the leading economic research firm IHS Markit, found that equipment manufacturers added $159 billion to the Gross Domestic Product (GDP) of the United States last year.
The report came as major segments of the equipment manufacturing industry met at CONEXPO-CON/AGG in Las Vegas, and as national elected leaders place a renewed emphasis on manufacturing jobs and infrastructure investment.
The research project offers the best snapshot of the equipment manufacturing industry’s reach in several years.
The report found that equipment manufacturers in the United States supported over $416 billion in sales activity in 2016, generated about $87 billion in labor income (amounting to about $78,000 in wages per equipment manufacturing industry job), and contributed over $25 billion in local, state and federal taxes.
Texas leads the country in equipment manufacturing employment and output, the report found, followed by Illinois, Wisconsin, Ohio and Iowa.
The research also examined the equipment manufacturing industry’s impact in Canada. Equipment manufacturers in Canada supported some 149,000 jobs last year, and generated some $15 billion (USD) for the Canadian economy in 2015.
“AEM is proud to represent the men and women of the equipment manufacturing industry across our country. This new report helps to put into context the many great contributions of our industry,” said AEM President Dennis Slater. “Our industry is a core part of America’s manufacturing economy, and we are eager to continue to grow, and, hopefully with a significant investment in our infrastructure, help put millions of Americans to work.”
IHS Markit additionally examined the equipment manufacturing industry’s impact over the construction, agriculture and energy (including oil and gas and mineral exploration) equipment segments. IHS Markit found that construction equipment manufacturers make up about 38 percent of the industry and directly support 163,000 jobs; farm equipment manufacturers represent 27 percent of the industry and directly employ about 114,000 people; and energy equipment manufacturers account for about 35 percent of the industry and directly support 148,000 jobs.
The research examines the direct impact of equipment manufacturers on the economy, as well as indirect effects at suppliers, service providers or other ancillary businesses related to the industry. The report also accounts for the induced effects of the industry (i.e., the additional effects on employment and income in communities).
The report adds additional detail about some of the key variables that support each industry segment, and forecasts growth for the industry into 2018 and beyond.
Investor Elliott Management has again suggested that BHP should review its dual-listed structure and reorganise as a single company in Australia to add over $22 billion in value for shareholders.