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<span style="font-weight: bold;">With improved coal output and an anticipated momentum in iron ore and other minerals mining in the coming years, the mining equipment segment sees some revival in its prospects in the short to medium term.</span><p></p><p> India is witnessing an improved growth trend in coal mining, as Coal India Ltd (CIL) is aiming an output of one billion tonne by 2020. CIL has earmarked a capital investment of Rs 57,000 crore, as part of the road map for one billion tonne target, with a planned capex of Rs 8,500 crore in 2017-18. Meanwhile in the non-coal mining areas, the iron ore and limestone mining are looking at an upward revival in the short to medium term, which are currently on a muted growth scenario due to slow production in steel and cement sectors. Mining equipment industry, which largely relies on the mining activities in coal, iron ore and other metal segments, is currently a bit concerned with the prevailing trends in mining. However, market studies anticipate a revival in the near to short term owing to the capex plans of the mining PSUs and the government's major plans on infrastructure development. </p><p>On the current trends, <span style="font-weight: bold;">Shib Bhowmik, Country Head &amp; Managing Director, Joy Global (India) Ltd,</span> comments, 'In the current year, India's coal production has been quite flat even though during the past two months, production increased substantially. Combined with the fact that pit head stock also reduced sharply during this period, it is a clear sign that dispatch and demand for coal have started increasing.' Correlating with the global trends, he further adds, 'With global growth forecast of solid 3.6 per cent, we expect energy demand and demand for coal to remain at a high level globally and that will impact somewhat in India also. We also expect demand for iron ore and lime stone to increase based on increased steel and cement production forecast.'</p><p>Volvo CE has high expectations on Indian mining market as <span style="font-weight: bold;">Dimitrov Krishnan, Vice President and Head, Volvo CE India,</span> says, 'Coal mining remains the most important sector of the market, followed by iron ore and then limestone.' On the market trends, he adds, 'Over the past six months, the market environment has not been good due to excess coal production and a gap in the supply-demand for power generation. For iron ore, the market is stagnant because of a lack of new licences for production. This is down to a delay in environmental clearances and ongoing lower commodity prices. For the limestone market, activity levels have been low over the past two to three years, with cement plants running 50-70 per cent of their capacity. However, we are seeing some investment in this sector which is translating into new equipment purchases.' According to him, the long-term prognosis for all sectors of mining remains positive. </p><p>'Over the course of the next three to five years, we expect a compounded annual growth rate (CAGR) of five to seven per cent. If you look at the subdued activity of the mining sector over the past 20 years and then compare that with the current projection, then it is a very positive outlook for this sector,' Krishnan comments on a positive note.</p><p>While focusing on the market for bulk material handling systems in mining, <span style="font-weight: bold;">Y Srinivas Reddy, Managing Director, Bevcon Wayors, </span>observes, 'With the opening of coal mines for private operators, demand is going to be created for bulk material handling industry in coal sector, as huge investments are expected in coal washery projects towards mineral beneficiation. Also, new mines are going to open up for operations.'</p><p><span style="font-weight: bold;">Dinakar B, Senior Vice President - Sales, Marketing and Aftermarket, Volvo Trucks India, VE Commercial Vehicles Ltd, </span>is positive on the way the mining sector is performing in these days. Referring to the index of industrial production (IIP) data, he elaborates, 'Mining sector performance in the current fiscal reflects a marginal 3.3 per cent growth over last fiscal. Coming to the segment-specific trends, coal production by Coal India in the first six months this fiscal grew by 0.8 per cent on year-on-year basis, achieving 95 per cent of their planned target. In the last couple of months, thermal power plants have reached to a critical coal stock levels of below eight days, triggering the demand for coal. Going forward, as the overall economic activity recovers and the industrial output gains pace, the coal demand is further slated to improve.' </p><p>According to Dinakar, steel sector continues to perform well with crude steel output growing by 4.5 per cent in the first half of this fiscal and estimated to reach over 100 MT by end of this fiscal. 'With the steel consumption also at a similar pace of 4.3 per cent while 81 per cent capacity utilisation so far and the anticipated infrastructure growth, demand for steel looks impressive going forward. This in turn will drive the demand for iron ore.' However, cement sector has been under pressure reeling through the impacts of demonetisation and the GST with the overall construction activity not taking off as anticipated. He adds, 'Current capacity utilisation of cement plants on pan-India basis is around 70 per cent, which is at almost similar levels as last year. </p><p>However, government's thrust on infrastructure and execution of projects in housing, roads, dedicated freight corridors etc, gaining pace, revival in cement demand is expected and so the demand for limestone.' Based on these trends, Divakar is of the view that long term fundamentals for the mining sector overall remain strong. </p><p>According to Pavethra Ponniah,<span style="font-weight: bold;">Vice President and Sector Head, Corporate Ratings, ICRA,</span> there have been a lot of tenders this year by Coal India and its subsidiaries for over-burden removal, which is expected to revive demand towards the later part of 2017. She adds, 'Demand for new equipment from Singareni Collieries Company Ltd (SCCL) is expected during Q1CY2018. Some demand for mining equipment can be generated by the private mine developers and operators; however, quantum of the same is likely to be moderate.'</p><p> <span style="font-weight: bold;">Demand-supply scenario</span><br />Demand for equipment relies on the scale of operations going on at various mining sites. For the past few years, the mining operations were declined due to which a lot of machinery were lying idle. However, now with the operations slowly picking up, these equipment are back in action. With the mining majors planning to acquire more higher capacity and technologically improved equipment, more supply requirement is anticipated in the near future. Major equipment players are equipped to handle this scenario, as Bhowmik says, 'There is enough supply capacity in India and global companies including Komatsu Mining (former Joy Global) have established local supply and manufacturing facilities.' According to him, with Komatsu's acquisition of Joy Global early this year, the industry will see a very significant player in 'Komatsu Mining Corp' and the customers will see benefit with this synergy and coming together of two global industry leaders.</p><p>Krishnan comments, 'It is clear that greater investment will be needed at mining sites given the increasing activity and ambitious targets that the industry is planning. Mining remains a focus for the government (in terms of coal) and private firms (in terms of coal blocks, cement, iron ore and other minerals). There is a widespread recognition that new technology and equipment will be required to meet the proposed growth plans.'</p><p>About the demand-supply scenario for bulk material handling equipment, Reddy is of the view that currently there is no major demand, but the scenario will be clear by third quarter of 2017-18.</p><p> <span style="font-weight: bold;">Growth trends</span><br />Currently the mining sector in the country is progressing through a staggered growth scenario. The growth trend varies across the various mining sectors of coal, iron ore, limestone and other minerals. Says Bhowmik, 'We expect a stable demand situation for our equipment even though we see considerable opportunity in some specific segment in the next one to two years.'</p><p>Krishnan anticipates an above-average business at Volvo CE in the coming years for a couple of reasons. He explains, 'Firstly, our mining machines are a perfect match for the work that is currently required, such as overburden removal at planned mine sites. Our EC480DL and EC750DL are both very well-suited to this work as they offer higher productivity and higher reliability at a lower cost per cu m. As coal block sites open up, larger excavators, particularly our EC950E, will be a good option for many operators.'</p><p>He adds, 'Secondly, Volvo CE is a well-respected brand in the mining industry and we have a proven track record in India. Trust is an important factor for customers in the mining sector. They want to use equipment they can trust, and when they need support, they want to work with brands they can trust. We have worked very hard on our technology and our investment in the dealer network, to enhance their customer support capabilities, so we can meet the future demand and continue to earn the trust of our customers.'</p><p>Reddy expects expects a minimum growth rate of 20 per cent year-on-year in the bulk material handling systems in mining. According to Dinakar, in the coal mining segment, market for premium trucks has grown in the last five years. 'Volvo Trucks has a dominant position and consistently been the market leader. With the government committed to the one-billion tonne coal production by 2020, the infrastructure and construction projects being executed, we are positive on demand uptick for premium trucks.'</p><p> <span style="font-weight: bold;">Capex in mining</span><br />Mining is a segment where a lot of machinery and equipment is required to perform various heavy-duty jobs. So mining is a huge capital intensive segment with a lot of capex investment required. As mentioned earlier, mining PSUs especially are in the process of acquiring more and more equipment to perform various mining jobs. Says Bhowmik, 'Major capex initiatives will come in the next few years from PSUs in coal and lignite with focus on increasing production, evacuation and technological upgradation. There are some significant capex initiatives in private metal mining. Private sector investment in coal and lignite mining will depend on further clarity on regulatory issues and market situation.'</p><p>Krishnan states, 'We have seen capex investments at the PSU level translate into new machine purchases and mining infrastructure development, as the focus continues on achieving the one-billion tonne production target by 2020. Overall, we believe that the outlook at PSU facilities remains good. There is private investment also in the iron ore sector that is creating a bit of interest. Again, we expect to see this pick up in the coming years. For the limestone market, we're seeing more activity as companies add new equipment to give them additional capacity or to replace old machines.' </p><p> <span style="font-weight: bold;">Technology adoption</span><br />With mines going deeper and the scale of mining going bigger, newer methods and bigger machines are being introduced over the past few years. Technology plays a major role in achieving the production targets with improved productivity and efficiency, while giving due importance to safety. Says Bhowmik, 'Large mining companies including PSUs are considering higher capacity and higher productivity equipment. Also, there is increased focus on safety and safer machines with lesser man-machine interface.'</p><p>Krishnan highlights the technology associated with Volvo excavator loader ranges, 'For the machines that Volvo CE sells, we are seeing ongoing interest in our mid-size (40-50 tonne) and large (75-100 tonne) excavators, as well as our mid-size (four to six cubic metre bucket) wheel loaders. Mine owners remain focused on optimising their cost-per-hour or cost-per-tonne rates. They want to achieve faster cycle times; move larger loads; and achieve high rates of reliability from their equipment fleet. This is well-aligned with the performance of Volvo CE machines, so we are seeing a lot of interest and increasing user preference for our products.'</p><p>Reddy comments, 'We always strive to bring in value innovation technologies to India and in the end our customers will have winning edge in their processes and business. We execute projects with a blend of the latest technology with conventional systems in the most optimised manner which will enhance the operation's reliability. Our core strength lies in the use of new generation/innovative conveying systems and equipment in mining sector.'</p><p>'Higher productivity at optimum efficiency, delivering lowest cost per tonne or cost per cu m will be the key for choosing specific mining equipment by our customers,' says Dinakar. He adds, 'Mining industry with relevance to our presence in the mining transport solutions face several challenges in terms of shortage of drivers, pressure on execution of projects with strict time lines, better control on overall fleet to enhance the utilisation and efficiency, rising fuel costs etc. In order to address these challenges, customers have been embracing new technology improvements in their operations.' </p><p>According to Dinakar, Volvo Trucks offers innovative and technologically most advanced solutions for its customers with lifetime profitability approach. He elaborates, 'We have a significant leadership position in the coal overburden transport application. This application has been very tough and demanding in terms of higher depth of operations reaching up to 200 m, 20-22 hours of operation in a day and treacherous site conditions. To address such challenges, we have been constantly introducing new products over the last over 19 years from 290 hp 16 cu m capacity 8x4 tipper to 520 hp 10x4 dump trucks today with 26.1 cu m capacity. Through our new and innovative product range, coupled with tailored support services, enabled our customers to 'do more with less' while keeping the unplanned interventions required on the truck very minimal.'</p><p>He highlights the example of I-Shift technology. 'The Volvo I-Shift is best-in-class AMT (automated mechanical transmission) that allows the driver to completely focus on driving while the I-Shift manages the gear shifts effectively based on the speed, load and the gradient and terrain. I-Shift guarantees optimum shifting thus ensuring better fuel efficiency, almost three per cent better than the manual transmission. Driver fatigue is also reduced substantially.'</p><p><span style="font-weight: bold;">New solutions</span><br />Leaders in mining equipment have introduced new improved solutions in surface mining and underground mining operations. Bhowmik elaborates more on the new solutions from the company, 'We have and are going to introduce new continuous cutting and bolting machines, battery-operated shuttle cars and technical improvement in many of our offerings in underground soft-rock mining. We are also offering more energy-efficient equipment in our surface mining equipment.'</p><p>Volvo CE is a major contributor of equipment in overburden removal and mineral movement with its range of excavators and haulers. Krishnan elaborates on the new ranges from the company, 'At Volvo CE, we have introduced two new range topping machines in our excavator and articulated hauler lines. The EC950E is Volvo's new flagship crawler excavator and it has already proven to be extremely competitive in its 90-100 tonne weight class. Similarly, Volvo's new 60 tonne A60H, the world's largest articulated hauler, sets new productivity standards for open cast mines and other large infrastructure projects. While both machines offer state-of-the-art performance individually, it is when matched together that mining customers can experience the unprecedented productivity and ownership advantages these units offer.'</p><p>According to Krishnan, the EC950E will move around 35 per cent more material than the EC750D which was previously the largest machine in Volvo's excavator range. For the A60H hauler, it will move 40 per cent more material than the Volvo A40G. The EC750DL has been sold into a variety of sectors, such as coal over burden work, mining for iron ore, bauxite, zinc and barite; as well as applications serving the cement industry. It is the preferred choice in the 70-85 tonne class. </p><p>'By using these highly-productive machines, our mining customers can get more done with fewer machines, allowing them to optimise their fleet sizes. This delivers better operating efficiency, particularly in mine management. Having larger machines also means fewer operators and less maintenance, delivering further resource optimisation.' Conveyor belts play a major role in the bulk movement of ores and minerals in mining. Bevcon Wayors has introduced innovative solutions from the US and Europe in India. Says Reddy, 'Bevcon executes projects with a blend of the latest technology with conventional systems in most optimised manner, which will enhance the operations reliability. Bevcon's core strength lies in the use of innovative conveying systems and equipment, which caters present day demands of Indian mining sector.' </p><p>He elaborates on the bulk material handling solution offered by the company, 'Our highly competent technical team supported by technology partners from the US and Europe are in position of supplying the innovative equipment like: Sandwich belt high angle conveyors for vertical conveying application which is a revolutionary concept; Overland pipe conveyor, a modern and environmentally friendly transporting system for all kinds of bulk materials by overcoming numerous challenges associated with conventional conveyor systems; Overland troughed conveyor, designed to carry high tonnage loads over long distances; Stockyard system like stacker, reclaimer, stacker-cum-reclaimers, full and semi-portal scrapper reclaimer, side scraper and belt conveyor system for maximising the space utilisation to meet the expectations of project; Bulk receipt feeders to facilitate easy handling of bulk material unloading from trucks without civil works of ground hoppers; Reclaim feeders for faster reclamation of minerals at mines and ports; and Idlers and pulleys manufactured by Be'RolleX, Bevcon associate, to meet high capacity and high speed applications.'</p><p>Volvo Trucks is the leader in the premium truck segment with a wide range on offer. Dinakar elaborates, 'Over more than 19 years of our presence in India, in our constant endeavour to offer long term profitability for customers in the select application segments, we have been introducing a wide range of innovative high-performance trucks right from the first 8x4 concept tipper with 290 hp and air-conditioned cabin way back in 1999 to the largest capacity multi-axle tipper FMX 520 introduced in 2015. Currently, we offer FMX 460 8x4 BS IV tipper with 19.5 cu m and FMX 520 10x4 dump truck with 26.1 cu m for coal overburden application and FMX 460 8x4 with 33 cu m for coal hauling both raw coal and washed coal.'</p><p>Volvo Trucks also offers customised product offerings depending on the application requirements like 46 cu m capacity tip-trailer for coal transportation application. For coal haulage application through a dedicated haul corridor, the company offers 148 cu m road-train solution coupled with suitable tractor, thus offering superior productivity with minimum number of truck fleet. 'With such a wide and innovative product range, we have redefined the productivity and performance without compromising on efficiency in the most demanding and tough mining applications.' </p><p>Dinakar also explains the control technologies associated with the range, 'I-shift is a superior innovation that ensures precise torque from engine is available at wheels through electronic control unit and driver can concentrate on maneuvering the truck, making his driving experience safer, easier and very comfortable. This enhances driver productivity in tough mining operating conditions. Dynafleet is the intelligent fleet-management system which captures the data from the truck on a real time basis and generates user-friendly reports. This will enable our customers to closely follow the performance of our trucks by monitoring from their office and following the trends, necessary changes can be implemented in the operations to achieve maximum efficiency.' </p><p>Volvo Trucks has also given great importance on safety in its range of vehicles. Dinakar explains the safety features, 'We take a great pride to mention safety is in our DNA as we have pioneered safety innovations. Safety features enable an efficient interaction among human, machine and environment. Some of the safety features in Volvo Trucks include the three-point safety belt, cabin tested as per the toughest Swedish norms, auto parking brake, energy absorbing steering wheel and injury preventive interior trims as well as instrument panel. Our FMX series tipper range is compliant with all the DGMS mandatory safety requirements.'</p><p> <span style="font-weight: bold;">What lies ahead</span><br />The future of mining in India looks challenging but growth opportunities are aplenty as minerals and coal need to be explored and mined to meet the future demands of the country. Bhowmik is optimistic but cautious in his approach when he says, 'India offers opportunities in selected mining technology segments and at the same time there are challenges in the market place mainly in procedural delays and consequent commercial implications for equipment manufacturers.'</p><p>Reddy is however is optimistic about the outlook of mining equipment with an expected growth of 15-20 per cent year on year. Dinakar sees some challenges within the positive outlook on the industry. He says, 'We are extremely positive on the opportunity and the potential for mining equipment coming from the massive infrastructure and mining push by the government. However, there are certain challenges which must be addressed in order to ensure faster execution of the projects like land acquisition continues to be a significant bottleneck in the execution phase. Implementation of GST is a major boost to the economy in the long run, but need to optimise the tax structure for construction equipment to augur well for the sector.'</p><p>In the short to medium term, coal and iron ore mining which constitute the major share of the country's mining market, is expected to grow due to the increased infrastructure and construction activities, and the efforts to meet the one billion tonne coal output target by 2020. Though the bottlenecks of land acquisition, environment clearances and certain policy related issues can be hurdles in the sustainable growth of mining, the overall outlook remains positive for the mining equipment market.</p><p> <span style="font-weight: bold;">- Sudheer Vathiyath</span></p>