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2018 to see increase in turnover by German mining equipment manufacturers

Published by
Global Mining Review,


For German manufacturers of mining equipment, the domestic market now only plays a minor role in their business plans, with a total turnover expected to decline by 22% to €90 million in 2018.

According to Dr. Michael Schulte Strathaus, Chairman of VDMA Mining, the current policies demonstrate little affinity to the business of raw materials, and therefore mining, and are highly unlikely to provide any impetus for domestic business. Germany’s mining equipment industry is therefore becoming increasingly dependent on foreign business. While Germany’s last hard coal mine has been shut down, Poland is currently expanding the country’s hard coal mining activities in an effort to reduce its dependence on imports. Hardly any impetus is also expected from the potash and salt industry, as Schulte Strathaus emphasised during the association’s annual press conference. The sector expects a further decline on the domestic market in the coming year, with the best-case that of a stagnating turnover.

13% more export-generated turnover

According to the forecast by VDMA, export revenues will increase by 13% to approximately €3 billion. 25% of exports are delivered to EU countries, a figure which has declined from the 31% achieved in 2017. The biggest customers are Italy, Austria, Poland, France and Belgium. As Schulte Strathaus explained, the market is primarily marked by major infrastructure projects which will gradually be completed, and there are currently no adequate replacements in sight. VDMA is therefore expecting stagnant exports to EU countries in 2019, with slight increases at best. According to calculations by VDMA, the USA’s share of the total export volume will increase from 15% in the past year to 17% this year. Schulte Strathaus cited President Trump’s changes to energy policies as one of the reasons for this development. Restrictions have been loosened, an effect which has led to an increased use of hard coal mined in the US.

This has led to considerable demand for machines that can increase productivity and, consequentially, profit; a development which benefits German manufacturers in particular. The industry is expecting a further moderate increase in exports to the US in the coming year.

Healthy business with China

German mining equipment manufacturers are also enjoying healthy business with China, with the export share to the country expected to increase from 7% to almost 10% this year. According to Schulte Strathaus, policymakers in China have realised that establishing high performance mines can only be realised to a limited extent when only domestic technology is used. German manufacturers provide technologies that are either unavailable in China or only available to a very limited degree, however, China is making considerable efforts to close existing technology gaps.

Schulte Strathaus stated: “We still have an edge when it comes to extraction technology, especially in underground mining. However, we do not know how long we will be able to maintain our lead, or perhaps expand it.”

The industry expects that its exports to the People’s Republic of China will increase further over the coming year.

The future for German mining equipment manufacturers lies outside domestic borders, Schulte Strathaus emphasised. With the support of VDMA, the sector began increasing its activities abroad at an early stage. New markets were the subject of intense exploration and development, and it is therefore no surprise that the sector has an optimistic view of the future. The demand for raw materials will continue to increase. Schulte Strathaus pointed to an assessment by the OECD which found that the demand for raw materials will nearly double by 2060. This will have a positive and sustained impact on business. Increased demand is primarily expected by companies which extract raw materials to be used in the production of alternative energy generation.

Roadmap aims to support companies

German mining equipment manufacturers will increasingly have to deal with demands that society places on raw materials extraction and thus the mine operators as customers of the equipment manufacturers. Schulte Strathaus used the keywords sustainability, green mining and safe and healthy working conditions. Together with VDMA, a roadmap is currently in development, which is intended to support companies in identifying new challenges and reacting to them in line with market requirements and thus successfully. The task is to now filter the decisive parameters from the vast amounts of machine data collected and make it usable for controlling the machines and, ultimately, the entire process. Schulte Strathaus’s Chairman said: “This is exactly where one of our strengths lies.”

Read the article online at: https://www.globalminingreview.com/mining/05122018/2018-to-see-increase-in-turnover-by-german-mining-equipment-manufacturers/

 

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